Fort Lauderdale, FL (PRWEB) August 28, 2014
Paragon Financial Group, Inc. publishes article discussing the warning signs of a merchant cash advance market bubble. The article looks at the lack of access to small business loans and how merchant cash advance (MCA) lenders have stepped in to fill the demand. It continues to discuss the high growth in the MCA industry and dangers of MCA’s high interest rates of 60%.
As stated in the article, “With the limited funding options available for U.S. small business there is an increased number of entrepreneurs using MCA’s for more than just a short-term cash crunch. Very similar to payday loans for consumers, this type of loan does not solve long-term cash-flow solutions,” said Chris Curtin, Paragon Financial Group EVP.
“MCA’s high-risk financing has a much higher default rate than non-bank financing. A large number of defaults would make a negative impact on MCA’s availability. Investors will no longer see MCA’s as being viable,” said Curtin. “Companies that became reliant on these loans have the potential to default in mass. This type of pattern is very similar to what happened in the sub-prime mortgage industry bust.”
About Paragon Financial Group
For 20 years, US companies across all industries have been choosing Paragon Financial to meet their working capital needs. From government contractors to distribution companies, from staffing firms to manufacturers, business owners have successfully grown their companies with Paragon Financial’s invoice factoring, AR management, credit protection and purchase order financing programs. To get funded now, please call 888-271-9347 or visit http://www.paragonfinancial.net.