[WhoisKingsley]

If the client is doing 75k per month with 150k in debt to consolidate, the important questions to ask are:

What is the Gross Profit Margin?
What is Guarantors FICO score?
Was the business profitable (or near break even) even with paying for expensive debt?
Collateral isn't necessarily the issue- whether or not the business/guarantor can qualify for a loan is the issue.

Advances do not work to fix overleveraged merchants. If they are 'funded' 200k, and the term is 12 months, the MCA cost of capital will likely be above 1.3 meaning they just bought 110k more debt than they previously owed. If the client has taken on new contracts- or needs the fresh capital to address growth/acquisitions- those are the only viable reasons to 'buy' more debt, as the profits from the new opportunity will hopefully outweigh the cost of the new debt.

There are several folks on this blog that have been here awhile. How many different folks have said they do consolidations? How long does the program typically work before it is modified down to 2 positions etc.?

We have successfully consolidated 14 positions, and have done several others from 4-12 positions. We work with partner lenders based on the business type, and the reasons why a lender will look to be involved.

Please reach out to Richard for the love of all things MCA. Consolidation of balances was something that was created and misconstrued and now isn't a real consolidation at all. In your case you would need to stretch out the term to make his payments lower for a consol. Which outlet do you know of that will take that risk of paying off unsecured debt without putting something in place for it to not happen again? Doesn't exist in our space... just as much as COJs stopping Merchants from defaulting.

What you need is to qualify him for either a better LOC, Term, or SBA... Either way it's going to take some talking to figure it out. Give Richard a call or reach out to me even. I see these all week and it's an overwhelming to just talk the merchants down from their worry and letting them know there are wayyyy more options out there. As long as your not set in stone to make a quick buck and throw out the file- you can have this deal in your pipeline for years if you do it right