What Happens If I Just Stop Paying My MCA Loans?

Businesses that have multiple cash advances often struggle with affording to keep up with payments. Cash advances are designed to be paid back very quickly, which means that the high paced debt servicing could affect the business’ ability to keep up with payments as well as other business expenses. If you are currently shouldering 1 or more MCA, a Reverse Consolidation can help ease the debt servicing, which will make the payback process easier.

Missed MCA payments can trigger default and collection activity under the agreement. Possible consequences depend on the contract, any security interest or personal guarantee, applicable law and the facts. A UCC filing alone is not a court judgment, and a lawsuit or judgment is not an automatic result of every missed payment. If you receive a demand or court papers, seek qualified legal advice promptly.

Before stopping payments, review the available options and their full costs. Reverse consolidation may help support existing withdrawals through scheduled deposits and a separate repayment obligation. It does not erase debt, change the original MCA contracts or guarantee protection from default. We never contact your existing MCA lenders.

Here is how the program works:

1. A Reverse Consolidation funder deposits money into the business checking account on a weekly basis based on a pre-determined disbursement schedule. The disbursements each week are the weekly cumulative total of all weekly MCA payments.
2. Automatic payments from the current MCA funders are processed as normal. The Reverse Consolidation has essentially paid these, since the money was deposited into the account to cover these debits.

The new financing has its own repayment schedule. Compare the scheduled deposits with existing withdrawals and the new repayment. Deposits may decline as MCA positions are repaid, while payments on the new financing can continue after deposits end.

Any near-term cash-flow improvement depends on the approved terms and both schedules. Review total repayment and fees as well as the amount left for operating expenses. Lower near-term cash outflow does not necessarily mean lower total financing cost.