This Is What Happens If You Can’t Repay A Cash Advance

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This Is What Happens If You Can’t Repay A Cash Advance

Merchant cash advances are often maligned and deal with an image that is less-than-stellar thanks to the smear campaigns dealt by big banks. Most people assume that cash advances are legal loan sharking, and that the companies will get their money even if the borrower’s company isn’t turning a profit. But, because they assume things, they never really ask professional in the cash advance industry what the real deal is. Because of that, we at CPS have decided to devote an entire article to explain the difference between what happens when you can’t repay a cash advance, versus what happens when you can’t repay a bank loan…

When You Can’t Repay A Bank Loan…

Tough luck. You will owe another payment every single month that you skip, and there will likely be major fees that will be charged to your account as a result of it all. With every payment you owe, you will likely be less and less capable of ever repaying it. Getting amnesty from the bank or filing bankruptcy may not even be possible in most occasions - so you will very likely be stuck. 

After several months, banks may choose to take any property that you have put up for collateral. This can include your house, the business, or your cars...or all of the above. Moreover, your personal credit score will likely take a massive hit. So, you will be unable to make ends meet for years afterwards. 

When You Can’t Repay A Cash Advance… 

Since cash advances are not actual loans, you don’t have to repay anything. What they are is a purchase of your future sales for a sum of money that the company believes would be profitable to them. If you don’t make any sales, you don’t have to pay anything. In many cases, when business picks up again, you will just have to pay for a longer period of time. Cash advances are made for flexibility that way.

Moreover, since cash advances do not require collateral, you don’t have to worry about losing your house. Since they have nothing to do with FICO scores, you also don’t have to worry about ruining your personal or business credit.

Clearly, one of these options is a lot safer than the other - but don’t tell banks that! At CPS we give you the safer business financing option right at your fingers. Give us a call today, and you might be able to see your cash tomorrow.

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