MCA warning signs
Most bad advances look fine on the first call. The problems show up in the contract, the payoff math and the pressure to sign quickly. Here is what to look for.
Illustrative numbers. A business took a $50,000 advance at a 1.35 factor, so $67,500 is owed in total. At the halfway mark, $33,750 is still outstanding.
A renewal offer arrives for $60,000 at the same factor, with a 3% fee ($1,800). The new advance pays off the $33,750 balance at closing, so net new cash is $60,000 − $33,750 − $1,800 = $24,450.
The new contract collects $81,000. Subtract the $60,000 advance and add the fee, and the cost of this renewal is $22,800, almost as much as the cash it actually adds. Unless the contract discounts the old balance for early payoff, that $33,750 was going to be collected anyway; the renewal just restarts the clock on a larger number.
Fictional figures for illustration only. Fees, factors and payoff terms vary by contract.
Run any offer through the offer comparison worksheet to see net cash and payment pressure side by side.
A clean offer names the funder, states the advance, every fee, the purchased amount and the remittance schedule in one place, and gives you time to read the full contract. If it includes a payoff, the payoff letter is attached. If you already carry an advance, it says whether the new money sits in second position or retires the first one.
Merchant Fund Express shows you the funder, the amount, the schedule and the total payback before you sign. Applying starts from a 500 credit score, decisions come the same day and funding typically follows the next business day. If you are already in an advance that is straining cash flow, see how a refinance or buyout is structured.
One Merchant Fund Express application is matched with multiple funders, so you can compare net cash, total payback and payment schedule before you choose. Credit from 500, better credit gets better offers; same-day decisions; funding typically the next business day after signing.
Being asked to pay a fee before any money is funded. Legitimate fees are deducted at closing and listed in the contract.
Subtract the payoff of your current balance and every fee from the new advance. Compare that net new cash with the cost of the new contract.
Only if the SBA lender puts it in writing. A promise of a future loan with no commitment is a common complaint pattern.
Remittances normally come from the business account named in the agreement. Ask before signing if anything else is listed.
Count every open position. Many owners find more than about 15% of monthly deposits hard to carry through a slow month.
Same-day decision. Applying takes a few minutes and will not affect your credit score.
