You might not think to refinance or consolidate a merchant cash advance (MCA), but it might just happen to you if you are carrying a balance from an advance and decide to take out another. If you are considering or will ever consider taking out a MCA, this article is a must read!

When dealing with non-traditional financing options, it’s really important to understand what you’re giving and what you’re getting. This is especially true when it comes to taking out a second advance or loan from some of these alternative finance options.

We’ve seen Merchant Cash Advance (MCA) and Cash Flow Loan providers follow 
a weird practice that results in deeply hidden fees charged to the business owner.
First we’ll talk about this practice with MCAs Like loans, with MCAs you get a set amount of cash up front, called the advance. But instead of getting charged an interest rate, you agree to pay back the advance amount plus a good chunk more, e.g....

Private money financing includes Equity Investors, Private Financing and Crowdfunding. Contribute money in exchange for a percentage of equity, or ownership, in your company. Think Shark Tank, percentage of ownership based on risk, typically 20-60% is a viable option for startups as no tax returns are typically required, the “idea” might be enough to attract an investor. Investors will want to see value, such as a product with patents. In many cases they would prefer to see a tested and proven concept over just an idea. Private money often serves as SBA fall-out financing for loans that are close, but can’t qualify for SBA. Collateral is required, although often only 10-30%. Tax returns are required for two years, so no startups. An Executive Summary is required. Lenders are looking for average credit of 650 +. Loans can be in the millions, even billions of dollars. Loan times take 30-90 days to close and receive funds. Interest rates are usually 7%+ depending on...

Across the country, business owners who attempt to get a small business loan with bad credit are discovering that, rather than extending a warm and hearty handshake, their bank is giving them the cold shoulder. 

Why is this? It’s because banks don’t want to take any risk, and they view business owners with bad credit as personified “Red Flags”. As such, they won’t even consider offering a small business loan. They’re much more interested in focusing on their large and enterprise customers, and earning transaction and serve fees.

On the other hand, here at Shield Advisory Group, we understand that business owners are often forced into making regrettable financial decisions. For example:

• A major customer may have declared bankruptcy, leaving behind tens or hundreds of thousands of dollars in unpaid invoices that, frankly, aren’t worth the paper they’re printed on.
• A thriving market may have suddenly been gutted due to...

The DUNS number is a randomly assigned number issued by Dun & Bradstreet. It is used to identify the business. More than 50 global, industry, and trade associations recognize, recommend, or require the Dun & Bradstreet DUNS number. 

It is sometimes formatted with embedded dashes to promote readability, such as 15-048-3782

Credit Lines and Credit Cards function almost the exact same. One big difference is that credit cards offer reward points and intro rates of 0%, credit lines typically don’t. But you can use credit lines to get cash advances at much lower rates than with credit cards. Also credit lines are single accounts with a higher limit, whereas credit cards usually have lower limits… but you can get more cards. Having a higher limit and low rates for cash advance are the main benefits. But this is more of a FULL DOC program, where as other cards we’ve mentioned are more NO DOC.

Shelf corporations are not looked upon unfavorably by regulators, lenders, or the business reporting agencies. Many say they are unethical, borderline illegal, and some call them a fraud.

From Dun & Bradstreet… “It is unclear whether it is legal to use shelf corporations to access credit. It is clear, however, that this is a deceitful, unethical maneuver that serious entrepreneurs should avoid.” If the credit bureaus learn about the company being under new management, they will list it on their reports, effectively “re-aging” the company.

“Shell and shelf companies can be created domestically or in a foreign country. Shell and shelf companies are often formed by individuals and businesses to conduct legitimate transactions.

However, they can be and have been used as vehicles for common financial crime schemes such as money laundering, fraudulent loans, and fraudulent purchasing. By virtue of the ease of formation and the absence...

Business credit scoring is based on how you pay your bills. If you pay the majority of reported accounts on time or early, you will have a good score. Most business owners have little to no credit reporting. So, even one negative account can have a BIG impact on their business credit score.

It is essential that you continuously build your business credit profile just as you do with your consumer credit. One of the best ways to battle negative information on your report is to offset it with LOTS of positive information. So continuously build your business credit profile just as you do with your consumer credit

Crowdfunding is another great financing option for small businesses. With Crowdfunding, you use the collection of finance from backers—the “crowd”—to fund an initiative. Crowdfunding models involve a variety of participants including the people or organizations that propose the ideas and/or projects to be funded, and the crowd of people who support the proposals. Crowdfunding is then supported by an organization (the “platform”) that brings together the project initiator and the crowd. Crowdfunding allows good ideas that do not fit the pattern required by conventional financiers to break through and attract cash through the wisdom of the crowd. If it does achieve “traction” in this way, not only can the enterprise secure seed funding to begin its project, but it may also secure evidence of backing from potential customers and benefit from word of mouth promotion in order to reach the fundraising goal.

A Limited Liability Company (LLC) is a form of business whose owners enjoy limited liability, but which is not a corporation. A limited liability company is a flexible form of enterprise that blends elements of partnership and corporate structures. An LLC is not a corporation; it is a legal form of company that provides limited liability to its owners. LLCs do not need to be organized for profit. In certain US states, businesses that provide professional services requiring a state professional license, such as legal or medical services, may not be allowed to form an LLC but required to form a very similar entity called a Professional Limited Liability Company (PLLC). A Limited Liability Company (LLC) is a hybrid business entity having certain characteristics of both a corporation and a partnership or sole proprietorship (depending on how many owners there are). An LLC, although a business entity, is a type of unincorporated association and is not a corporation.

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You may be facing a choice between applying for an unsecured working capital loan or a conventional bank loan, and weighing the pros and cons. If so, then one of the key aspects you definitely want to analyze is collateral.

Why Banks Demand Collateral

As you may know, banks offset the risk of lending onto borrowers by demanding that they collateralize the loan with assets such as property, vehicles, equipment, securities and so on.

However, an extremely important point that some business owners aren’t aware of when they apply for a collateralized small business loan from their bank, is that they might not see eye-to-eye on certain aspects. Specifically, there are 3 common stumbling blocks that many business owners trip over -- and often through no fault of their own:

1. Disagreements on an asset value.

If you’ve ever shopped for a home, a used car (or even sometimes a new one!), or any other “big ticket” item, you’re aware that prices can vary; and...