Reverse Consolidations For Businesses With Multiple MCAs.

Refinancing replaces existing debt with a new loan, typically with the goal of reducing the overall cost of borrowing. While that may lower the total payback amount, it does not necessarily reduce day-to-day payment pressure, and in many cases, it comes with shorter terms or stricter requirements. A consolidation, on the other hand, is designed to address cash flow. By combining multiple obligations into a single, lower payment, consolidation reduces the business' daily outflow and provides immediate operating relief. In short, refinancing focuses on long-term cost, while consolidation focuses on short-term survivability and cash flow stability.

Savings from a Reverse Consolidation typically range between 25% and 45% of a business' total daily or weekly MCA payment obligation. To get a more accurate idea of how much your business could save, you can use our Reverse Consolidation calculator,(https://www.capitalizefunding.com/resources/funding-calculators/consolidation-calculator) or apply now (https://www.capitalizefunding.com/direct-apply)to see exactly how much your business would save.

As a Reverse Consolidation progresses, the existing MCA balances are paid down through the scheduled distributions. Each position continues to be paid as agreed until it is fully satisfied. As individual MCA balances are paid off, those positions naturally fall away. When that happens, the weekly distribution is reduced to reflect the remaining balances. Throughout the process, the business continues making the same single, lower Reverse Consolidation payment. The immediate cash flow relief is realized from day one, while the structure becomes simpler over time as positions are eliminated.

Yes. Reverse Consolidations are structured as week-to-week programs, not long-term locked commitments. A business can exit at any point if circumstances change or if it chooses to pay off the remaining balances early. In the event that a Reverse Consolidation is exited early, the business is only responsible for the repayment of the weekly distributions it has already received.

No. A Reverse Consolidation does not compromise existing lender relationships. Original lenders are not notified that a business has entered a Reverse Consolidation, and they continue to receive payments on the same schedule and terms originally agreed upon. In many cases, a Reverse Consolidation actually helps preserve lender relationships by ensuring payments are made consistently and without interruption.

Reverse Consolidations are funded incrementally to manage risk. Businesses entering a Reverse Consolidation are often already carrying multiple MCA positions, which increases the risk associated with any new funding. Rather than advancing the full consolidation amount upfront, incremental funding allows the lender to support the business while limiting exposure. The lender is only at risk for the amount that has been distributed at any given time, not the full approval amount. This structure makes consolidation possible in situations where a traditional lump-sum consolidation would not be viable.

No. Reverse Consolidation is not debt settlement and does not involve intentionally withholding payments from lenders. Debt settlement places a business into default by stopping or diverting payments in order to force creditor action. That process typically results in legal judgments, damaged relationships with lenders, and long-term restrictions on future funding options. Reverse Consolidation takes a different approach. Existing advances remain in place and are repaid according to their original terms. The structure is designed to stabilize cash flow while allowing obligations to be met, rather than disrupted. Payments continue to be made, and lenders are not forced into action.

Possibly. Whether additional funding is available during a Reverse Consolidation depends on the specific structure in place and is ultimately at the discretion of the Reverse Consolidation provider. Once a Reverse Consolidation is active, businesses should avoid taking on new lender relationships independently. Introducing new funding or renewal funding without coordination can disrupt cash flow projections and jeopardize the consolidation structure itself. For that reason, any additional capital needs should be discussed directly with the Reverse Consolidation provider first. Uncoordinated advances may result in the consolidation being terminated, at which point the business becomes fully responsible for all existing advance payments while remaining obligated under the consolidation agreement. In many cases, if additional capital is needed, the Reverse Consolidation provider can evaluate the situation and determine whether supplemental funding can be structured in a way that aligns with the existing consolidation and preserves cash flow stability.