[Thewolfofallstreetz]

Hello,

I have a client I recently funding with 3 positions with a total balance of $1.9M

They’re currently paying daily and they’re struggling to make payroll.

Right now they’re trying to sell off some assets to pay off their debt but in the meantime they need to free up some cash flow mainly for payroll. They also have a decent amount of money on their AR but a handful of their biggest clients are outstanding.

They’re actively generating new business but still struggling at the moment and for the foreseeable future until they sell off some assets and start getting paid from their new contracts. Their main concern is making payroll.

Should I advise them to do a reverse consolidation to help them free up some cash flow for the time being and hope they sell some assets to cover their debt or should they attempt to reach out to lenders to see if they can modify terms or lower payments?

[Yankeeman07]

Hello,

I have a client I recently funding with 3 positions with a total balance of $1.9M

They’re currently paying daily and they’re struggling to make payroll.

Right now they’re trying to sell off some assets to pay off their debt but in the meantime they need to free up some cash flow mainly for payroll. They also have a decent amount of money on their AR but a handful of their biggest clients are outstanding.

They’re actively generating new business but still struggling at the moment and for the foreseeable future until they sell off some assets and start getting paid from their new contracts. Their main concern is making payroll.

Should I advise them to do a reverse consolidation to help them free up some cash flow for the time being and hope they sell some assets to cover their debt or should they attempt to reach out to lenders to see if they can modify terms or lower payments?

Do I have this correct - You stacked them to the tune of$1.9 Million in MCA $$$? And now you want a reverse?

My best advice to the client is to find a broker/funder/lender that can provide them with relief NOT utilizing a MCA.

They may have options, but, as I generally state - the devil is in the details.

[Thewolfofallstreetz]

Dave I understand where you’re coming from but that isn’t the case here. I got them a first position November 2022, my old boss gave them a 2nd position May 2023 after I had already left.

The merchant reached out to me asking me to help because they were going to fall short on payroll so I did what I needed to help them make payroll but do to the urgency of the situation I didn’t have time to get the best deal or rate so they got stuck with a 1.49.

They’re in a sticky situation with outstanding balances on their AR that they were expecting.

[Yankeeman07]

Dave I understand where you’re coming from but that isn’t the case here. I got them a first position November 2022, my old boss gave them a 2nd position May 2023 after I had already left.

The merchant reached out to me asking me to help because they were going to fall short on payroll so I did what I needed to help them make payroll but do to the urgency of the situation I didn’t have time to get the best deal or rate so they got stuck with a 1.49.

They’re in a sticky situation with outstanding balances on their AR that they were expecting.

A third position - with a rate of 50 cents on the dollar - ouch. Plus whatever origination fees they were charged.

There may a solution(s) - Contact me tomorrow - late morning -early afternoon.

Time left on the 11/22 position? - Amount still owed?
Time left on May 2023 Position - Amount still owed?

What other debt ?
Do they have commercial real estate?
Tax Returns Filed - Business & Personal?
Those are a few of the questions I will be asking.

[abfunders]

This is why having a line of credit is so important. They would likely do we with an AR line. However, the only challenge will be that they are effectively going to have to pay off the MCAS with anything they get now. Which will make their projections over the next two months also fall short. It is training debt for that, but it gets them in a much better position. Or, you could find a factoring company that will come into first position and the other three positions will subordinate. Or you can do a combination where the factor will come in and pay off two of the positions and one will subordinate. Or you get a factor and consolidate the other three behind something else more creative. I love doing these deals, it's just a very often the clients are very difficult to convince them to change what they've been doing until now and shift gears entirely. Or, they have an SBA in first position or other LOC and they don't want or can't afford to pay that off.

So I'll ask my normal questions. What's the senior debt? What is the industry? Is there any other available collateral like equipment or real estate? How's the personal credit? How's the business credit?

[Bcooper]

Hello,

I have a client I recently funding with 3 positions with a total balance of $1.9M

They’re currently paying daily and they’re struggling to make payroll.

Right now they’re trying to sell off some assets to pay off their debt but in the meantime they need to free up some cash flow mainly for payroll. They also have a decent amount of money on their AR but a handful of their biggest clients are outstanding.

They’re actively generating new business but still struggling at the moment and for the foreseeable future until they sell off some assets and start getting paid from their new contracts. Their main concern is making payroll.

Should I advise them to do a reverse consolidation to help them free up some cash flow for the time being and hope they sell some assets to cover their debt or should they attempt to reach out to lenders to see if they can modify terms or lower payments?

Hey sounds like your client could use debt restructuring rather than a reverse feel free to reach out.

[TeamFund]

Do you have contact info? There are a lot of avenues based on reconciliation laws that the merchant can take advantage of.

[Mynameisbob]

Hey sounds like your client could use debt restructuring rather than a reverse feel free to reach out.

My guy got his office next to round up in Davie fl with a company named midwestern financial solutions

[Bcooper]

My guy got his office next to round up in Davie fl with a company named midwestern financial solutions

Considering I'm from the Midwest and started the company in the Midwest and moved to Florida the name is fair. It's no secret I'm a Hoosier born and raised. Not sure who round-up is or what you are insinuating there.

[Ehenek]

Why not obtain the full financials. I would also ask about other assets that you could utilize to extract working capital. I would engineer this file potentially with some short-term relief and use the MCA...I am sorry the reversal to satisfy that. Then make sure that you have an exit strategy.