How to Consolidate MCA Debt

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).

1. The Least Likely Option

Payoff refinancing depends on a provider’s eligibility rules, the existing balances and the proposed terms. There is no universal approval rule requiring every business to receive 50% of the new financing as additional cash. Request the actual payoff and new financing figures.

2. The Most Likely Option

Reverse consolidation provides scheduled deposits to help cover existing MCA withdrawals. The original MCA agreements and withdrawals continue. A separate repayment is due under the new financing agreement. Compare deposits, repayments, fees and obligations after deposits end. Any near-term cash-flow reduction depends on approved terms and does not guarantee a lower total financing cost.

3. The Best Option

A business revolving line of credit can be used to pay off MCA debt. Although this program is reserved for qualified near prime borrowers, most line of credit applicants have existing MCAs. Since a line of credit has low interest rates of anywhere from 8% to 4.5% annually, using funds from a line of credit to pay off high MCA debt is a great way to save cash flow to MCA short term payments. The requirements for a Line of Credit in your State can be found here at LineofCreditDepot.com.