Stacked MCA payments can drain a business faster than the underlying debt ever would. Reverse consolidation cuts the weekly cash outflow without touching your existing advances, giving operators room to run the business again.
.svg)
If your business is paying multiple MCAs at once, here is what you need to know!
If you are currently paying multiple cash advances, you undoubtedly know how unsustainable this debt servicing can be.
If you have been paying more than one cash advance at a time, this MCA debt savings calculator will give you some sobering insight into what percent of your business’ available ‘on hand’ cash is being used to pay down expensive MCA debt.
Merchant Cash advances are designed to be a short-term fix for immediate business cash flow needs. Most businesses understandably aren’t heavily capitalized, and owners usually don’t have a solution when they need money for their business. MCAs are a popular solution when immediate influxes of cash are needed to solve an immediate business problem or to enact on an immediate business opportunity. But what happens when today’s solution becomes tomorrow’s problem?
Every business encounters the need for financial support, often resorting to debt financing for capital. Merchant cash advances offer a swift and convenient avenue to promptly acquire funds. For those navigating the repayment of a merchant cash advance, the concept of reverse consolidation becomes a valuable consideration. Whether you've utilized this financing method before or are contemplating its use, understanding reverse consolidation is key.
When it comes to Consolidating Merchant Cash Advance (MCA) debt, you have 3 options. We have seen all sorts of businesses throughout the years, all with different amounts and positions of MCA debt. Each situation is different, but there is one constant trait; every business owner wants to get out of MCA debt! Here are the options that you have based on likelihood of approval and program quality, all of which don’t include debt restructuring (defaulting on the MCA funder).
Every business owner has a reason as to why they needed to borrow a cash advance in the first place. Whether it be to pay off some bills, expand, use for payroll etc, but no one expects to get into a cycle of borrowing more and more expensive money
Odds are that you don’t want to pay off all of your MCA debt with your business cash, especially if you are feeling the cash flow crunch associated with multiple daily or weekly automatic payments. A traditional consolidation with a lender would mean that a funder would pay off all your existing MCA debt and then you would just have 1 payment. In the alternative lending industry this just doesn’t happen (explained below), but there is a process to exit the cash advance cycle that works!
If you have multiple cash advances that you are currently paying, I can assume 2 things. You want to be paying less daily or weekly and you are confused with what your options are.
If you have a Merchant Cash Advance, you are not alone…it’s estimated that nearly 1 million small businesses in America have had a cash advance. The quick access to cash and the ease of getting funded is a major reason why businesses take a cash advance. During the fast payback period, businesses can feel the pressure of lower cash on hand. Why consider defaulting if you can’t afford the payments? A Reverse Consolidation will lower payments and extend the term.
Many businesses who we meet are crushed with MCA debt. We’ve had clients with more than 10 MCA loans…at a single time! A Reverse Consolidation does work, because it solves the basic problem with paying many MCA’s at the same time. When your business cash flow goes to making MCA payments and not for running the business, a Reverse Consolidation is the perfect solution.
.png){kind=small}
.png){kind=small}
