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December 22, 2022

Merchant Cash Advance Warning

Are you looking for a Merchant Cash Advance (MCA)?

What is an MCA?

An MCA is a payday loan. When you take an MCA a finance company provides you a large lump sum in exchange for the sale of your future bills. An MCA is not the same as a loan. MCA companies are not federally regulated and are thereby not required to disclose all the fines details to you.

Taking an MCA violates the terms of your factoring agreement and is generally a very risky source of income.

MCA's sound like a quick and easy way to get funds, BUT:
  1. They are VERY high-interest rates (usually 30-90%, sometimes over 100% by the time you add fees).
  2. Hidden fees that add up FAST
  3. Usually require LARGE DAILY PAYMENTS directly withdrawn from your bank account to your MCA finance company.
  4. HIGH fees for defaulting on the MCA with NO WAY OUT.
  5. Require you to provide your customer list which will be used to notify your customers of default requiring the customer to send payments to the MCA finance company.
  6. Include deceptive contracts with confusing language.
  7. May include confession of judgment (COJ) allowing the MCA finance company to come after not only your business assets but also your personal assets should you default.

Our sales and legal team are here to help you navigate these decisions and may be able to assist you in avoiding costly mistakes and the potential of going out of business. Please feel free to call us if you are thinking about getting an MCA. We may be able to help!

877-881-3456 | 507-235-3456

Kristina Newcombe

Legal Assistant at Great Plains Transportation Services, Inc.

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