Merchant Cash Advance (MCA) loans have exploded in the last few years due to the speed of which they can be funded, however the high interest rates and short repayment terms associated with these loans lead many small business owners to seek a debt consolidation through an SBA lender.

Here are a couple things to look out for when analyzing an MCA debt consolidation under your SBA 7(a) program:

1. Underwrite your global debt service coverage right away

2. Make sure the cash is staying in the business and not being drawn out for personal use

3. Was the debt used for growth?

4. Was the debt tied to an isolated incident?

5. Are they a serial MCA borrower?

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