FAQs Archive - Page 29 of 31

Q: What Is The Difference Between A Bridging Loan And A Mortgage?

Bridging finance and a mortgage differ in that a loan can be secured against a property that may not meet the requirements for a regular term loan. This includes properties that need renovations, will have a change in ownership, or a change in use during the loan period.

Q: What happens to debt in an acquisition?

When a company acquires another, it may choose to take on the target company's debt, subtract it from the sale price, or pay it off prior to finalising the deal. The purchaser may also discuss with the lender to decrease the target company's debt and lessen the overall cost of acquisition.

Q: Do I qualify for a merchant cash advance?

MCAs are a type of short-term business financing where you receive a lump sum payment in exchange for a percentage of your daily credit card sales. Qualifying for a merchant cash advance (MCA) depends on several factors including but not limited to Credit Card Sales Volume, Time in Business, Monthly Revenue, Credit Score, Industry Type, Payment Processor, Collateral, Financial Statements, and Application Process.

Q: Can I repay the cash advance early?

You can usually repay a merchant cash advance (MCA) early, but the terms vary by provider. Review your MCA agreement for prepayment terms, potential fees, or discounts. Discuss your intentions with the provider, consider the financial impact on your business, and document the repayment agreement if you decide to repay early. Consulting with professionals can help you make an informed decision.

Q: What is a factor rate?

A factor rate in business loans is a fixed repayment amount expressed as a multiple of the original loan sum. It's commonly used for short-term loans, where borrowers agree to pay back a set total without interest. Factor rates are simple to calculate but may result in a higher effective interest rate compared to traditional loans for longer terms. They're often used for quick access to funds but require careful consideration and comparison with other loan options.