Merchant cash advance providers

[WreckingPoll]

What are your thoughts on merchant cash advance providers? Are they legal? For example, if the merchant is not qualified to get a loan due to low credit or no credit etc. can i send him/her to merchant cash advance providers for a loan? Is it safe?

 

[balancesheetboss25]

Sure, MCAs are totally legal. They're technically not loans; they're more like buying future sales, which is why rate caps don't really come into play. I had a client with poor credit who gave it a shot, it helped in the short run, but those daily paybacks were tough to handle.

You can definitely send someone in that direction if they're struggling to get approved anywhere else, but just make sure they're aware of the steep costs and choose a reputable provider. It's definitely not a low-risk option.

 

[chrishemsnorth]

What are your thoughts on merchant cash advance providers? Are they legal? For example, if the merchant is not qualified to get a loan due to low credit or no credit etc. can i send him/her to merchant cash advance providers for a loan? Is it safe?

Merchant cash advances are legal, but risky, they're not loans, so they avoid interest rate limits but the cost can be extremely high, with daily or weekly repayments that hit cash flow hard. You can refer someone if they can't get a loan, but it should be a last resort and definitely make sure they understand the terms, @balancesheetboss25 basically said the same thing