"Merchant Cash Advances Making Good Decisions in Tough Times"

June 3, 2020

News

Operating a successful business requires working capital and regular cash flow. When money is tight, business owners often consider alternative sources of funding when more conventional sources are less available. One of the riskier and more dangerous funding options is the merchant cash advance (MCA). MCAs alleviate short-term cash needs, but often leave the merchant with a long-term financial crisis.

An MCA allows a business to obtain immediate funding against future receivables. Similar to a consumer pay day loans, the business is selling future revenue for cash today. Most MCAs are repaid within six to twelve months.

The repayment of the advance, plus fees and possibly other charges, is made by either: (1) a set percentage "holdback" from daily or weekly credit card receipts, or (2) an automated clearing house (ACH) withdraw from the business bank account in a fixed daily or weekly sum.

Click here to read the full article from the May/June 2020 issue of TMA Ohio Turnaround Times.

McDonald Hopkins is proud to announce that members David Agay and Joshua Gadharf have been recognized as recipients of the 2024 Turnaround and Transaction of the Year Award by the Turnaround Management Association.

In an article for the Northern Ohio chapter of the Turnaround Management Association, Michael Kaczka, Jory Berg, and Jack Spencer provide insight on whether a bankruptcy trustee can sell or assign causes of action that arise from the trustee’s avoidance powers under section 544(b) of the Bankruptcy Code.

McDonald Hopkins strategic advisory and restructuring attorney Maria Carr shared her perspective on changes in bankruptcy communications when the business in question operates within the cryptocurrency market, in an article published in the Cleveland Metropolitan Bar Journal.

"Merchant Cash Advances Making Good Decisions in Tough Times"

You may also be interested in