01.
PRESERVE CREDIT SCORE
Maintaining a healthy credit score is crucial for future borrowing, vendor relationships, and business operations. Debt settlement can significantly damage your credit, whereas refinancing helps you stay in good standing with lenders.
02.
IMPROVE CASH FLOW
Refinancing allows businesses to lower their payments and improve cash flow immediately, ensuring they have enough working capital to keep operations running smoothly. Debt settlement might offer short-term relief, but usually requires upfront payments, which can still strain cash flow.
03.
MAINTAIN RELATIONSHIPS PROVIDERS
Refinancing eliminates the risk of legal consequences like lawsuits, garnishments, or asset seizures. Debt settlement can lead to legal action if creditors reject the settlement offer or if negotiations fail.
04.
PREVENTS LEGAL ACTIONS
Refinancing eliminates the risk of legal consequences like lawsuits, garnishments, or asset seizures. Debt settlement can lead to legal action if creditors reject the settlement offer or if negotiations fail.
05.
AVOIDS TAX LIABILITIES
Refinancing does not trigger tax consequences, whereas debt forgiven through settlement is considered taxable income by the IRS, resulting in potential tax liabilities.
06.
LONG-TERM FINANCIAL STABILITY
Refinancing provides a clear, structured repayment plan that offers stability. Debt settlement might provide temporary relief but can cause long-term financial issues such as limited borrowing capacity and credit damage.
07.
POTENTIAL FOR FUTURE BORROWING
Businesses that refinance demonstrate responsibility and improve their financial standing, making it easier to secure future loans. Debt settlement makes lenders cautious about working with businesses that have a history of paying less than owed.
08.
LOWER INTEREST RATES
Refinancing consolidates high-interest MCA debt into one loan, often at a lower interest rate. Debt settlement doesn’t change the interest rates—it only attempts to reduce the debt amount.
09.
NO DAMAGE TO BUSINESS REPUTATION
Refinancing shows responsibility and financial prudence, which helps maintain a strong business reputation. Debt settlement can harm your business's credibility with both creditors and vendors.
10.
LESS STRESS & UNCERTAINTY
Refinancing provides a predictable, manageable payment structure, reducing stress and providing clarity. Debt settlement can take time, with uncertain outcomes and ongoing stress.
11.
AVOIDING COLLECTION CALLS & HARASSMENT
Refinancing consolidates your debt into one manageable payment, freeing you from the burden of dealing with multiple MCA lenders and their collection efforts. Debt settlement can prolong harassment from collectors during negotiations.
12.
NO RISK OF GARNISHMENTS OR LEGAL CONSEQUENCES
Refinancing removes the risk of garnishment or legal actions, as you continue to pay your debts in full under new terms. Debt settlement can lead to legal actions if creditors reject the settlement.