MCA Consolidation and Renewals FAQ
MCA consolidation, renewals and getting out of MCA debt.
MCA consolidation pays off several open advances with one new advance, so you have one payment instead of many. It only works if the new payment is lower than the old ones combined. Start by listing each advance, its balance and its payment, then compare the options below.
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Consolidation, renewals and MCA debt
Options when payments are too heavy, and how renewals and add-ons work.
What is MCA consolidation?
MCA consolidation pays off several open advances with one new advance, so you have one payment instead of many. It only works if the new payment is lower than the old ones combined and the total cost is worth it. List each advance, its balance and its payment before you compare consolidation offers.
Read more: MCA consolidation
What is a reverse consolidation?
A funder sends you weekly amounts that cover your existing payments, then collects a smaller payment from you over a longer time. Your old advances stay open and get paid down as usual while it runs. It lowers the cash going out each week, but it adds a new payback, so compare the total cost.
Read more: Reverse consolidation
Should I choose consolidation or reverse consolidation?
Consolidation replaces the old advances with one new advance and one payment. Reverse consolidation leaves them in place and lowers what you pay out each week. Consolidation needs enough new money to pay off every balance, and reverse consolidation doesn't. Compare the total cost and your weekly cash flow for each.
Read more: Reverse consolidation
What is an MCA renewal?
An MCA renewal is a new advance from your current funder, usually offered once part of the first advance is paid. Part of the new money pays off the old balance, and you get the rest. The key number is the new cash you actually receive, compared with the new payback you take on.
Read more: Renewals and add-ons
When should I renew an MCA, and is it a good deal?
Many funders offer a renewal once part of the balance is paid, and each sets its own point. Being offered one doesn't mean you should take it. Some renewals charge a full new factor on money that mostly pays off the old advance, so compare the new cash you get against the new payback, and against outside offers.
Read more: MCA renewals
How do I get out of MCA debt?
List every advance with its balance and payment, stop taking new ones, and call your funders about reconciliation if sales have dropped. Then compare consolidation, a reverse consolidation or a restructure. If you're facing a default or a lawsuit, talk to a business lawyer before you stop or block any payment.
Read more: When payments are too high
Should I use a debt settlement company for MCAs?
Be careful. Some charge high fees and tell you to stop paying your funders, which can trigger a default, fees and a lawsuit. Ask who they are, what they charge, and whether a licensed lawyer is involved. Get an independent lawyer's view before you sign with one, and read their contract as closely as the funder's.
Read more: When payments are too high
Can I ask a funder to restructure my payments?
Yes. Many funders will lower payments for a while if you ask early and show the drop in sales with recent statements. Ask for the new payment, how long it lasts and whether the total payback changes, all in writing. A restructure is usually easier to get before a payment bounces than after.
Read more: MCA reconciliation
What is an MCA buyout?
An MCA buyout is when a new funder pays off an existing advance as part of a new deal. The payoff comes out of your new advance, so the cash you actually receive can be much smaller than the advance amount. Check the net funding, the new payment and the new total payback before you agree.
Read more: Stacked payment calculator
Still have a question?
Call 877-FUND-654 with any question. We call you back, usually the same business day, and we always talk with you before we shop your file.