Merchant Loan Relief
If you own a business and find that you’re in need of quick funds, a merchant loan (or a merchant cash advance) is available to alleviate your monetary needs. Generally, businesses with poor credit can acquire loans to help with their day-to-day operations. However, merchant loans are often viewed as last resorts for small businesses, and for good reason. For businesses that take out merchant loans, they often get stuck paying exorbitant fees from their APR (which can reach 300% or higher). Merchant loan relief can be a great way to help alleviate some of
Why Merchant Loan Relief Might Be Right for Your Business
If you’ve taken out a merchant loan, chances are the loan itself might cost you a lot more than you anticipated. Much like payday advances, merchant loans are only meant to be quick fixes for small businesses. Unlike payday advances, merchant loans work based on the business’ ability to make money (normally through credit card sales). If your business takes out a merchant loan and your credit card sales decline, it might take you a longer period of time to pay the loan off but the APR drops. Should your credit card sales increase, you can pay off the loan faster but the APR will increase.
While the way APR works on a merchant loan might make some businesses want to repay the loan quickly to avoid higher fees, unfortunately there is no benefit to doing so. Agreeing to pay back a merchant loan means that you agree to pay whatever predetermined fees that accompany it. Paying the loan off early will rid you of the obligation, but it won’t make the amount you have to pay any less.
Merchant loans are technically not loans. They are considered commercial transactions, not unlike a transaction you’d make within the confines of a store. What this means is that there is no federal oversight for these transactions. Unlike banks and other loan providers (who are federally regulated), merchant loans are regulated by the Uniform Commercial Code.
Another comparison that can be made between merchant loans and payday loans is the fact that they can provide much needed money to those with less than stellar credit. More traditional loans provided by banks can have lower APRs due to the credit score of the applicant. Merchant loans are much easier for business owners with bad credit to acquire, but there is still a risk of having your credit checked by the merchant loan provider. If counted as a hard inquiry, this can damage your credit score.
How to Attain Merchant Loan Relief
If you find yourself indebted to a merchant loan provider, it’s best to resolve your obligation to them before your business ends up too dependent on merchant loans. Merchant loan relief can provide a much needed way out of owing merchant loan providers and locking your business in a potentially endless cycle of merchant loan borrowing. Merchant loan contracts can also contain confusing wording for those looking to take a loan out. If you’re looking to break your business out of needing merchant loans, you can seek professional help through a debt relief company. Debt settlement can help your business save money on the loan while potentially incurring minimal harm to your operations.
Contact Our Partner BizRelief Today
If your business has fallen into financial problems and you need an affordable way out of debt, BizRelief has a solution.
BizRelief offers debt negotiation solutions to help small businesses quickly and safely reduce their business loan debt.
Their team of experienced debt relief specialists are dedicated to providing you with a quick and easy way out of your current financial burdens through business debt negotiation services.