Coming from the MCA/Cash Advance world, a request to pay off the referring company sounds EXTREMELY shady. That being said, my company provided the client with a 14-month MCA because we were already in discussions with an SBA lender to do a complete debt consolidation for the client and she was in need of some immediate working capital at the time to pay down some vendor debt she had.

SBA, after providing a commitment letter, killed the deal in underwriting and said paying our balance off was a conflict of interest and if our financing stayed in place, the deal could not cash flow.
*EYE ROLL* I know. We “shot ourselves in our own foot”, right?

BUT… we went into this thinking we had an out for her that would allow her to get her business back on track and allow her the opportunity to start purchasing higher priced drugs again to expand her business.

Details:
-~$300K-$350K in monthly sales
-In business since 2010
-XPN 740 (*credit last ran in Oct)
-2018 P&L had net income of +$148K
-Our balance is ~$191K, only MCA – immediate refi request
-Vendor debt is ~$479K – these are wholesale pharmacy distributor balances that ideally would be re-fi’d.
-2 small bank loan balances of ~$65k – can be included in re-fi.
-Approx. $700K is owed to the prior owner but that is on reasonable terms and does not need to be re-fi’d.

There is a huge opportunity here for the right lender that cares about their clients (and about making money, of course). Thoughts on possible solutions for this client are welcome! TIA!
-Megan