Can I Consolidate My MCAs If I'm Already Behind on Payments?
It's possible but harder. Funders will look at a consolidation for a business with a few recent returned payments if deposits are still solid, but once advances are in default, collections or court, most consolidation funders pass and a negotiated settlement becomes the more realistic path.
How far behind is too far to consolidate?
A few bounced payments during a slow stretch, with the account recovering, is a common situation, and some consolidation funders work with it. Accounts where payments have stopped entirely, where funders have sent default notices or where lawsuits have been filed are much harder. The more serious the default, the fewer funders will step in.
What do funders want to see when you're behind?
- Deposits strong enough to carry one consolidated payment comfortably.
- A clear reason the payments slipped, like a lost customer or a seasonal dip.
- Current payoff letters from each existing funder.
- No new advances taken after the trouble started.
Why does honesty matter so much here?
Consolidation funders read your statements closely. They'll see the returned payments and the funders' names. Explaining the situation up front lets us send your file to funders that work with recovering businesses instead of collecting declines.
What if consolidation isn't available?
Other paths exist. Ask your current funders for reconciliations, which lower payments to match your actual sales. Ask about modifications or payment plans. In more serious cases, a settlement with each funder can resolve the balances. Be careful with debt settlement companies that charge large upfront fees. Understand exactly what they'll do and what it costs before you sign.
Should you take another advance to cover payments?
Taking a new stacked advance to cover the old payments deepens the hole. It's the most common way a manageable problem becomes an unmanageable one.
Is this legal advice?
If funders are threatening legal action, talk to a business attorney. This is general information, not legal advice.
Should you talk to your current funders first?
Before you shop a consolidation, call each funder and tell them what's happening. Some will pause or lower payments for a few weeks while you sort things out. That buys time, stops fees from piling up and makes your statements look better when a consolidation funder reads them. A funder that hears from you before a payment bounces is almost always easier to work with than one chasing you after.
How do a few clean weeks help?
Even a short stretch of payments clearing on time, at a reduced amount if needed, improves your chances. Funders look at the most recent weeks closely. A recovering pattern tells them the worst is behind you.
How can Afterfirst help with this?
Call 877-FUND-654 and tell us honestly where each advance stands. We'll tell you whether a consolidation is realistic now, and if it isn't, what to try first so it becomes realistic later.
What else do owners ask about this?
- Can I consolidate business credit cards or loans along with my MCAs?
- Can I get a new MCA after defaulting on one?
- What happens to my old UCC filings after an MCA consolidation?
More short answers on this topic are on the renewals and consolidation FAQ, and the MCA renewal calculator runs the numbers for your own file.
Have a question we didn't answer?
Ask us on the call. 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.