Loans are an essential part of every person’s life and at some point each one of us requires a loan from one of small business loan companies to accomplish some task or the other. From buying something new, to starting a business, loans play an essential role in our day to day life. It will not wrong to state that credit is the lifeblood of today’s America with thousands of working capital companies answering merchant cash advance faq and offering merchant business funding.
However, to be in the good books of a company you must pay your loan back on time. Not doing so for any reason will get you in hot water and even legal trouble. One major merchant cash advance requirements is that you pay back the loan within due date. So ‘are merchant cash advances a good idea?’ we’d say yes, but you still need to play safe.
There is more than one repercussion of not paying back your loan because this is how merchant cash advances work. Listed below are some of the possible actions that could be taken against you if you are unable to pay your loan:
Perhaps the scariest of the three, lawsuits can turn a man’s life upside down. If a default occurs on a personal loan, the lender can take over and liquidate your possessions. A judge will decide whether your reason for not paying the loan back is legitimate enough or not, but regardless of what the reasons are, he will force you to pay the money back instantly. This is how merchant cash advance industry works and one needs to be aware of the facts.
- Monetary penalties
When unsecured loans or working capital loans do not have anything to reciprocate attached to them, the lender can attach harsh penalties for late payments. He has the ability to increase your interest every thirty days. And catching up to the total loan amount is very hard and should you default on the loan, then you will be obliged to pay the entire amount plus interest within the allotted time given in the contract. However, merchant advance loan is still a better option with less daunting conditions.
- Poor credit score
Having a poor credit score can cause you much difficulties especially while applying for a merchant cash advance loan. Poor credit ensures that either you do not get the merchant advance financing that you want, or if you get it, you get it at very high interests rates. Not only that, with a poor score, you might find it difficult to find a job in some of the sectors as several companies like to see your credit score before they hire you.
All loans, documented or undocumented including business cash advance loans or merchant loans are taken to be paid back and as a borrower, it is essential that the repayment of merchanting financing for customers is done as fast as possible to prevent ruining your track record for the future.