Ghosts, vampires, zombies, and werewolves are all creatures that we have come to associate with Halloween. All have two things in common; one, they aren’t real, and two, if they were, they’d be terrifying. It is funny how once a year we all dress up and welcome the idea and concept of being scared for fun. Imagine, though, the terror of Halloween following you every day of the year. Imagine a financial terror, slowly watching hundreds of dollars drip out of your bank account every day, your business flat lining, imagine paying interest rates that have triple digits, imagine being a victim of predatory lending practices that Dante claims should land your lender in the seventh circle of hell.

What if that horror were real? Well, for thousands of business owners that is a sad reality that they live with every single day in the form of the spooky and treacherous merchant cash advances and daily debit loans. Yes, businesses caught in the spiral of these expensive loans can end up paying back their money at an equivalent APR interest rate of up to 600%. Let that sink in. 600%. It’s not a typo. That’s real. Borrowing money at a 1.5 buy rate over a month equates to an APR higher than the number of pieces of candy the average trick-or-treater brings home. Now, while that is on the extreme side of these expensive loans that require daily paybacks, the most affordable side doesn’t look very appealing either. Even at an optimistic 1.15 buy rate and a year term, you’d be looking at a 35% APR. That’s just not right.

In case you haven’t had the pleasure of being frightened by one of these haunting loans, let me give you the breakdown. A regular loan is usually amortized, a fancy word for saying that you pay down on the principle and interest at the same time, while also allowing you to make larger than the minimum payments in order to pay the loan off faster with less time for interest to accrue. If you paid off a traditional loan in one year versus three, you’d save a ton of the interest, you have that option. Well, with a daily debiting merchant cash advance loan, you have no options, you are lent cash at a rate: $100,000.00 at a 1.25 buy rate means that you will pay back $125,000.00 regardless of whether you pay it back over a week, month, or year. You could take the loan out on a Tuesday, win the lottery on Wednesday and pay that extra $25,000.00 on Friday if you wanted out of the loan. Now that’s scary.

Luckily, for small businesses there are options. There are reputable online lenders that pride themselves on not offering any costly advances that hurt cash flow and prey on small businesses with ridiculous interest rates. They offer healthy term loans with reasonable mid-prime interest rates to small and medium-sized businesses seeking growth. We can also buy out expensive cash advances which can turn grueling daily payments into one affordable monthly one. Additionally, some offer Lines of Credit for Inventory and operating expenses; so that your business can have the cash it needs when it needs it.

Don’t be worried about the shadows on the wall this Halloween, or a ghostly apparition appearing at midnight, be scared of the real threat out there: triple digit APRs that hurt cash flow and cost businesses more than they should are more than scary, they’re real, and should be avoided at all cost. Take the spooky out of financing by doing some research and finding a lender that won’t leave you buried in scary debt.