Ep #7 Exploring Merchant Cash Advances: A Lifeline for Your Business with Jack Laudani

Introduction: 0:13

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Jacquelyn Jackson: 0:47

Hello everyone and welcome to today's TDJ Equity Funding Insiders podcast. Today we have a special guest that has come in. It's on the lending side. They are direct lenders, and today we're going to talk about the MCAs, which is mostly excuse me Merchants Cash Advance. So I guess today it's going to help us to understand how that works.

Jacquelyn Jackson: 1:10

We know in the loan business and the loan brokers business, there are all different types of loans that you actually can do for your business, but a lot of times, as business owners, entrepreneurs, we don't know what will work best for us. So what we try to do on this program is to actually show you all the options that you have out there. It is so much options you have out there. Whether you have good credit, bad credit, low revenue, high revenue, there is different things you can do to fund your business. Mcas, merchants Cash Advance is one. So who we have today is an account manager. We have Jack Ladone Ladone, I'm sorry. There we have Jack Ladone. He's from Long Island, new York, and he has been in the field for a while. So he's coming to us today to give us his insight and enlightenment of what we need to do and how do we go about getting an MCA, so let's welcome Jack to our show. Welcome to our show, jack.

Jack Laudani: 2:07

Thank you, Jackie, for having me, and I'm really excited to be here.

Jacquelyn Jackson: 2:10

Okay, great. So if you would, let's start off one. I do want you to tell us a little bit about yourself and then definitely explain to us the MCAs as well.

Jack Laudani: 2:21

My name is Jack Ladone. I am born and raised in Long Island, new York, suffolk County, and I have around six years of lending experience and recently I did move to Austin, texas, working in the MCA and line of credit field. In regards to your question about MCAs, mcas are an alternative type of business financing. It's not a traditional SBA type of loan, which is from the traditional bank. With an MCA, a company gives you an upfront sum of cash that you can repay using a percentage of your future debit or credit card sales and, again, a big benefit of this is the speed of funds and how fast you get it. Some of these MCA companies can fund in a day or even two days If you need to make payroll. This is also beneficial for companies that are around a year or two in time and business as well.

Jacquelyn Jackson: 3:27

Okay, they would have worked for okay. So, basically, what we're saying with the MCAs, you're giving us an idea of what is, what it's about, how you can use it and how it kind of works a little bit, and I know throughout the show we're gonna go in more detail with that. So, with your experience with the MCA, let's ask this, because we've had our clients, you know, to call in and they've asked some questions as well what type of companies need to go after MCAs for?

Jack Laudani: 3:51

as a lender, yeah, it's a great question. Companies that typically come to the table whether it's us or another company Pretty much are in need of the capital very fast. They have to make payroll at the end of the month to. They want to expand their business and invest in materials or just buy real estate with it. They can honestly use it for whatever they like, as long as they're able to pay it back efficiently. So it's kind of for whoever needs it and I'll talk about more of this in the interview as well. But you know, I preach out in a plan when you do this and make sure that you know exactly what you're gonna do with the funds and and be comfortable paying it back.

Jacquelyn Jackson: 4:39

Exactly because the reason like you're saying and and we know it's loan brokers and we tell people as well that come in and apply for MCA you have to understand you're gonna probably have to pay it back daily Minimal pulled out of your account, or you may be able to do it weekly. Either way, you need to have a really good cash flow. That's why I think MCAs are really good if your credit score is not where it needs to be but you have a lot of revenue or cash flow coming through your business. That's where you guys will look at the business income Mainly and not focus as much on the credit scores. Like said, but I know we got something to take it lowest 500, 550, whatever.

Jacquelyn Jackson: 5:17

But the thing is you're more into let's see how much you're making on a monthly basis, how much you don't have so many insufficients because you know You're allowed to have one or two and sometime more, depending where we're gonna sit them, depending what you guys are asking for. And so we're find out that with with the people to have an understanding that the MCA the big part about a MCA is being able to repay it back, because if they give you 250,000, can you deal with them pulling that every day amount out of your account and let's say this jacket. You know what is the time length compared to an MCA, compared to a term loan? What's the difference in the enforced terms with the MCA's?

Jack Laudani: 5:57

Yeah, mca versus a term is a big difference. I would say, like in regards to like, timing of funding.

Jacquelyn Jackson: 6:05

You're saying yeah, well, you know, like in, like, like you know term loans, they give them like three, five years to pay back. You know Six years with you to MCA's they hired they, they are done a little different than that, right, how are they done?

Jack Laudani: 6:18

Yes, yes, great question. So MCA's are Obviously more high risk. They are typically paid back Anywhere from four to six to twelve months in that range, maybe a little more, I think. I typically refer to it as like it's a company that is in its growth phase and they can qualify for a term.

Jacquelyn Jackson: 6:40

Right, if you're good for that.

Jack Laudani: 6:42

For term loans you need more experience, more time. And then term loans are, you know, like Jackie said, three to five years payback with a lower rate. So you know, our everyone's goal in this industry, hopefully, is to, you know, go get to the term loan phase and use Jackie and and others to grow the business Right. To get that. So let's say this.

Jacquelyn Jackson: 7:04

I know you mentioned something about high risk. Now, when you say high risk and I want my listeners to understand we're saying that it's a company, mca takes on high risk lending that normally banks and other ones won't do. So we're not saying it's a high risk, a chance you shouldn't take it, or it's not something bad. We're not saying that at all. We're just saying it's meant for those people that are Typically the banks do not want to deal with. Like you said, if you're new business and you only been in business for six months, compared to two years, they rather you be in business for two years before they start giving you money. So you can come to us to do an MCA and you can be in business for six months and got six months or three months of bank statements and we can look at that and see how much you would probably pretty much qualify for right. That's the information qualify for, that's basically what you guys will be looking for, right.

Jack Laudani: 7:54

So yeah, we look at.

Jacquelyn Jackson: 7:58

Okay, so let me ask you this that's what I was gonna ask what are you looking for when you see those bank statements? What are we looking for?

Jack Laudani: 8:05

Yeah, so there's like a few things and it really depends on which lender you are as well, but Credit score is a big one. Take a good credit score. We look at the revenues, so how much revenue so, or deposits that enter your business account. What are those numbers looking at, depending on the amount?

Jack Laudani: 8:25

Typically, that's about the amount that a lender could potentially give you so if you bring in 50k a month and lender may take a chance and give you 50 or more, depending on that. They see that on a consistent basis. And lastly, affordability, I think is a big one too. So if your account has negative, negative days where you didn't make the payment or payroll was taken out early, that's typically a red flag for certain companies. So we look at just making sure you're maintaining a strong daily balance usually above a thousand dollars.

Jack Laudani: 9:01

Every day, depending on the company, is everyone's different, but that's the three things I would say that we look for. And then the industry, and you know how you're getting it typically. Sometimes we'll look at that as well.

Jacquelyn Jackson: 9:16

Well, I'm, and, and also what I want to say too, when you look at the, if you're according to your business that I have seen it work well with MCA and I know it's a lot of different industries that you could use, but you need to be a business.

Jacquelyn Jackson: 9:27

Like you said, a thousand dollars a day is what we look for, or some type of consistency in the cash flow. So when we say cash flow, we're talking about those that get money daily. So someone like that would be like a gas station or bakery, anything that's retail. Pretty much those are daily, that you get a money daily, on a daily thing, compared to if you're an interior decorator, it may be two, three weeks before you get yours, you know. Or if you into, you know, a construction company, it may be two, three weeks, but we still can work with you based on the mass or the volume of money you have coming in. So that's something I think at MCAs, would you let people know what industry works better? So, with your experience, when it comes to a borrower who wants to consider the MCA for for as an option, what is the most important factor you think the borrower needs to consider when they're looking at an MCA funding as an option, and why?

Jack Laudani: 10:26

Yeah, I think they have to. I really stress this like, have a plan, make sure they're aware of. You know these funds are ending your account but, like Jackie said, certain companies will charge you daily to pay back, or weekly, depending on who you go to and what you qualify for. So I think you know, before you even get the cash injection into your business, think about what am I going to do every day with this? How am I going to invest this? What do I need to use this for?

Jack Laudani: 10:54

right because hopefully you come out on top of this and either get more funding or eventually go to an SBA place, as Jackie has as well. So I think there's you want to have a plan, you want to execute it. You don't want to just take the money and buy a car with it. You know, I think that should be used with your own cash flow. But you know, that's kind of what I recommend just have a plan and take action, execute right, because these, these MCAs, are something that, again, we explain.

Jacquelyn Jackson: 11:25

Because one thing about our agency, our company when you come to us, we look at it. What's best for you, where it may be a term loan or SBA loan, as you mentioned, or be an MCA, that's a good thing. By coming to the broker we can look and see what works for you. So with that experience we're going to say, when it comes to dealing with the MCAs, and we look at the use of funds, I tell people MCA loan is not what you take and go buy a car, like you just said, or if you're going to buy something that you are flipping, meaning that I'm going to use this money to hire this salesperson that's going to bring in this much money, that I need to use this money for that. If you're going to use it for equipment that's going to make the job go faster and get more money, then you want to do an MCA.

Jacquelyn Jackson: 12:08

If you're doing the payroll, that's great to use it for payroll, but if you have something that's going to make it bring money into the company, mcas are good for that. Now, if you need something long term, you're going to be, you know, for a little while it's going to take a minute to churn it, then you might not want to do the MCAs because they're anywhere from six and eight and 12 months. They want their money back. So definitely, like what you said, know what you're going to spend it on and get it spent and turned around and flip so you can be able to not, you'll be able to continue to pay the monthly or the weekly or the daily, but you'll also have a cash flow that's sustained you doing more. Because one thing about MCA and you can talk about the relationship. So once someone do something with you, how does their relationship helps them in the future by taking an MCA?

Jack Laudani: 12:57

yeah, yeah. So typically companies you know want a higher amount, typically right away. They may not qualify for that, but we usually say, or other others say in the industry you make your payments on time, you're consistent for six months, we can look at renewing and adding additional capital for you. So I think there's a lot of importance in maintaining a great relationship with your MCA lender because if you're on their good side, they're giving you more money, even at a lower rate potentially, and get it to you quicker and still get it to you faster.

Jacquelyn Jackson: 13:30

And that's why it's important how you look at the MCA relationships, because I've actually seen some of my business that have a relationship with MCAs and they use them. Like I said, when they need that money real quick, it's there and they still have the long term loans they may have. But once in a while we all in business realize sometimes you're going to need money quickly. Whether the boiler break down, oh the you know, the kitchen is going to heck, you know, we don't know if you're in the bakery business that can affect you. You need quick money and we're not saying the lenders are not out here. They are. But I think our listeners need to be aware that there are some lenders that move quicker and faster than others and MCA is definitely one that moves. What like in a day or two are putting funds in your account. Is that correct?

Jack Laudani: 14:15

yeah, it's super fast turnaround. You know, if you want it, you can certainly get it right away from a lot of companies. So I just think it's something that you need to prepare for. It's not like a month, month and a half long process with the SBA side. So I think it's very serious through money. Just prepare well, talk to the right people like Jackie's in your corner. Having a broker to kind of look around as many options as you can, I think, is also incredibly important.

Jacquelyn Jackson: 14:45

Okay, so basically I think you kind of answered. The next question I had was are there any funding opportunity that you've seen has been especially successful for MC a Borrow's? And you kind of mentioned some, and I know one point. You told me funding for equipment and expansion. So when do you think it's important to use them? So I know you mentioned the payroll, but what other ways can you give us an example that a MC a borrower Will have probably benefit from the funding of it especially? You know? So maybe yeah, or yeah, it's a great question I.

Jack Laudani: 15:14

We recently Help fund a supplement friend and they wanted to launch a mini type of supplement, you know, for weight loss or whatever they were doing. So this money injection enabled them to invest in more material To be able to do this type of, to create some of the supplement you know. So that that was pretty interesting, that they used it to know, double their business, create another product so they can sell it, which is very fascinating and that's probably gonna return them a lot of money and they've actually already asked for more funding. So it's pretty cool to see that it worked out really well and they're able to pay it back faster as well.

Jacquelyn Jackson: 15:58

Okay, great. So we and again I want to emphasize what you've said as well MCA is more is a quick money injection and and this is for our business owners you know that's an option you have because you can go to the bank and, as business, you'll get denied because a certain criteria you hadn't met. Mca has a lot less required required Quarter that you need to have in order to get that money and it's great for injection and that's basically what that is. You need it now, you need it to happen now. You can flip it, turn it and you can actually start paying on it at the same time. That's what this is meant for.

Jacquelyn Jackson: 16:31

So definitely, like you said, look at the cash flow, what your business is doing, and kind of see if that can match which. If not, like said, we definitely help them find them out. You will, too, are seeing how it would. You know, would you cash for enough for you can get an MCA. So that is important. So the next thing I want to ask you what would be you know, jack your top funding tip for our listeners today? What would be they, your top funding tip for them, and why?

Jack Laudani: 16:57

Yeah, honestly, I think it's talking to somebody like you. I think you're your broker, you have a ton of knowledge on what else is out there. So, I think, letting you know Jackie handle your situation, let let her hear your situation and, you know, let her present many options for you To take action and hopefully get for your business. And you know, I think an MCA, I think SPA, is a great ways to start and to keep your business growing without you taking your own money out and having to be kind of. You know you don't want to be Using your own liquid cash when you may have. You may need it one day for some life event, god forbid. So utilize your resources, prepare well, plan well, talk to the right people and feel comfortable doing so. And have some buyers side that will educate you and Explain every cost, what's gonna happen and negatives, positives, etc.

Jacquelyn Jackson: 17:57

Right. So actually just had a discussion, because I tell people a lot that your business can always raise more money than you ever can personally.

Jacquelyn Jackson: 18:05

Yeah you know, and the thing is that's what this is show is about. Our podcast is about letting owners, business owners, know MCA is one of your options. That's out there, you know, and a lot of them that come to us they don't even know about it and to explain it to them. But it's an option, so don't sit there in. You need money, you need help. You went to your bank. You've been turned down. You don't know what else to do. There are options out there. That's what we're telling you.

Jacquelyn Jackson: 18:32

Mca is one. Like you, you don't have the greatest credit and but you have, like, a lot of money coming in, but you still need some more money. Mca will probably be the best. We won a great choice for you, right, you know. So that's why we're doing this one.

Jacquelyn Jackson: 18:47

We really wanted this podcast to be about the MCA because people don't understand how it works and how it can really really help you. But I think it's great for someone to start and off in a business and it's really, really it cash flows pretty good and you need money. You're starting out young. Six months you've been in business. Then you may take that lower ten thousand or fifteen thousand right now with an MCA, which you'll get it within like 24 to 48 hours, and then, after you've paid it down, halfway down, and you're looking at where you can probably get more like now 30 and 40 thousand and build it up. Now you may not keep doing MCA's because you don't have to, but You'll have that relationship that when you need it and it will happen in business jack you know I'm telling the truth something's gonna pop off and you gonna need some money and that's why MCA's are good to have that relationship within your business relationship as well. Do you agree?

Jack Laudani: 19:41

Absolutely. I think relationship building is most important. I think skill if you're going to be a business owner, I think having people in your corner like Jackie and like others, the lending facility that gives you the money, create a good relationship. Them talk to their CEO I mean, you can certainly ask these, these questions, building relationship, building a rapport, because they certainly want to fund you again or help you again. So I think, just like establishing great relationship, asking the right questions what is this be? What does that be? Why do I pay back in this time? I think just having clarity and feeling told the rule is the biggest key in this process and Everyone is willing to help you.

Jacquelyn Jackson: 20:24

Right, that's gonna do it, so let's do this. Let's leave this without without listeners. What would they need to do to apply for MCA? What type of documents do you need?

Jack Laudani: 20:34

Yeah, so for an MCA, we typically Just to even apply. It's upfront, typically it's three months, bank statements and an application. Typically an application is from a broker like Jackie and then she would submit it to different lending facilities. So she again, she's a broker. She's able to find all different quotes and Approvals from different places to best fit your needs. She will go over those with you.

Jack Laudani: 21:05

I don't want to speak for her, but Okay, you're doing well, we're good and and then occasionally, depending on the lender, we will ask for maybe cash return one year, tax return, binational if you're looking for a significant cash injection and whatnot, so that that's typically where where it looks like Jarvis license avoid check other things like that eventually but basic documents that everyone could probably Be able to provide within a day if they need to right, and I will say that too at this point.

Jacquelyn Jackson: 21:43

You're looking at MCA as a one-page application, three months bank statement, maybe tax return based on the size of the loan or what you're looking for.

Jacquelyn Jackson: 21:52

But compare that to the regular term loans I mean we have, like compared to the three that we send you guys for MCA. There people need my other loans is in where from 13 to 22 documents, so it is more of a low document type loan, but you know there's gonna be a higher payback and, like I said, the cost of money is what I tell everybody it is. But it's like I said, you have to think it out and what you need to use it for, because this will benefit you, because it has benefited a lot of companies in the past. So before you go, we would like to know if you have a story of someone that had actually you know Another story that used the MCA and use it properly and paid it back, because I know you've been dealing with a lot of people. So do you have any stories like that so we can they can get a flow of how that works and how it should be done.

Jack Laudani: 22:39

Yeah, there are many people I've been lucky to deal with so far. Like I said, the supplement company was great. I dealt with some on the other day and for payroll they needed it really badly and we got it to them right away. I would say there was a Construction company looking to. They needed more equipment and it was a pinch. They were getting denied at a lot of places. They're able to provide us with the right financials and other things and we ended up building a good relationship. Throughout the process and Through all their persistence and waiting and providing more documentation, we were able to provide them the capital they needed to then build a new building or have materials to pay their people. I thought it was a very gratifying experience. You know, to hear their, their laughter and their excitement knowing that, hey, we're getting this money and it's not coming out of their pockets.

Jacquelyn Jackson: 23:34

Right, right, so it's doing so this is something like I said.

Jacquelyn Jackson: 23:39

It is a great industry product that a lot of people are using it and being successful and making a lot of money with it. Again, you have to know how to use MCA. If you would deal with a broker, a broker kind of guide you through it, because we got our clients do it, but that's and then definitely with you guys as direct lenders, you got the clients to it too, and so we know. If you get this, please, like you said earlier, get a clear understanding of what your cost is, what they want you to pay. You know, read those contracts and look at them and then you can see definitely what you need to do so you can stay on point. So I think that is something that's definitely a good advice to give with the MCA and learn and this is what I say learn for yourself, don't just listen to everybody else. Find out more about MCAs and learn about it and see how it can work for your company.

Jacquelyn Jackson: 24:28

Because one thing I've seen there's no company that's the same. Everybody's situation is different. It's amazing how different, but they are. So you need to know what's out there and what you need to do. That will work for you. So that would be great. So let me ask you this Is it anything that you will, your final words, excuse me, the words that you would tell our audience, any final word of wisdom that you would like to give them when it comes to getting funding?

Jack Laudani: 24:58

Yeah, I think I would just say like reach for the stars, you know. If you know there's opportunities like this out there and you're looking to build your business, work for yourself, not for somebody else. I think take the shot, go for it. Get the right, you know, get the right person in your corner.

Jack Laudani: 25:18

And I think, shoot the stars and invest and try. At least you can live knowing that you gave it your all, instead of sitting back on the sidelines. Work for someone else your whole life. I think go for it. You believe in it. I think get funding and pair yourself with and equip yourself with someone like Jackie to guide you through the entire process to see if it can all work out. So I think, give it your all, have fun, enjoy and make sure you feel comfortable, exactly, and I think that is.

Jacquelyn Jackson: 25:45

I totally agree and that is so true. So we want to thank our guest today for Mr Jack coming in to to speak and give us some of his wisdom. Thank you, and we definitely like to have you back as well as some time throughout the year for you to come back. Thanks again for coming and then I'm going to speak to our audience in a little bit. Thank you so much for coming, of course. Thank you so much, jackie and TD.

Jack Laudani: 26:07

Jack, I appreciate it and I'll see you guys soon. Ok, so we want to, like I said, we did enjoy.

Jacquelyn Jackson: 26:12

Jack coming in today. So what I do want to say with the MCAs is that they are meant for revenue. So if you have a revenue minimum of ten thousand dollars a month and you don't have the credit that you think you need, but your company is generating revenue, think about the MCA looking to him. You welcome to call us and reach out to us, or you can actually just Google and learn as about it as much as you can as well too. Ok, we want to thank you for coming and we wish you the best and you all take care. We hope you enjoyed this episode of TDJ equity funding insiders podcast.

Introduction: 26:52

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