This post was originally published on On Deck
Managing cash flow isn’t always easy. In addition to lines of credit and business term loans, many small business owners turn to merchant cash advances (MCAs) to get quick access to capital. While MCAs can be a lifeline, they often come with high interest rates (expressed as factor rates) and frequent payments that can strain your finances.
That’s where merchant cash advance consolidation comes in.
Consolidating MCAs could help simplify your payments, lower rates and potentially improve your credit score. But there are potential risks to consider as well. Let’s explore some of the benefits, downsides and what the process is like.
What is merchant cash advance consolidation?
Merchant cash advance consolidation is a financial strategy that allows you to combine multiple MCAs into a single loan with more favorable terms. Instead of juggling several high-interest business cash advances, you streamline your cash advance debt into one manageable payment. Having a simple repayment schedule can help you keep track of your business debt and plan for the future.
Consolidating MCAs typically involves taking out a consolidation loan from a lender who pays off your existing advances. You then repay the new loan at a potentially lower factor rate and with
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