Creative Financing

[Anonymous]

What are your experiences with creative financing, Merchant Cash Advances, Lawsuit Pre-Settlement Funding, Payday advances etc. Has anyone with credit issues ever used these services? I know they charge more than a traditional loan but they do serve a purpose to people like myself who banks outright laugh at.

[llecs]

You don't want to do a payday. Aside from super high fees, it can be scored as a consumer finance loan.

The cheaper, most effective route would be to go with a bank or CU. In my case, that wasn't an option because of damage to my CR so I began repair.

[Anonymous]

My experience with payday advances -

Their interest rates and fees are crazy high

It is almost like a losing battle trying to get it repaid

Didn't check credit

Didn't report on credit

Did report to places like Telecheck and Teletrack when I stopped paying

Was there when I thought I "had" to have the money

Would I do it again?

Absolutely not!

[brownee]

I've dealt with the payday loan folks and wouldn't recommend them. It's just so easy to bump the loan to the next payday, and then the next and so on...before you know it you've paid $650 to borrow $500. It's just not worth it. Now some people can borrow and just pay back the very first payday, but I wasn't one of those. :-(

[Anonymous]

It's like a pwan shop.  You know you are gettign screwed cost wise but if you are in a REALLY BAD situation and do not have reserves/family/or good credit to fall back upon at times they are the only way out.  Pay it back ASAP and learn the lesson.  Fix your credit.  Build some reserves.

[Anonymous]

What about a Merchant Cash Advance? Are there any business owners who have used this kind of program before? The way it works essentially is they will buy your future credit card sales at a discount, typically .75-.80 on a dollar. I know they don't care how bad your credit is and you don't have to put up collateral or PG it. The only determining factor is how much you process in credit card sales. You usually can get the cash wired to your account within a week. Has anyone heard of this or been through a program like this before?

[Anonymous]

That is an extremely expensive way to get working capital.  In most cases I have seen this used, the people were throwing good money at bad.  They were close to going under or something and did this to try and get back on track.  The problem is that now you are paying 20% or more of your CC transaction to someone else making profit impossible.  If it is a one time, short term thing maybe?

[Anonymous]

Well if you can take the advance and use it to purchase inventory at a discount, repair/upgrade the place of business, etc. Then you can take the $1 and turn it into $3, $4, $5, in which case the cost of the money is absorbed and justified. Plus it is quick and easy, and for those of us who are FICO challenged this is a great way to obtain necessary working capital.