Was hoping someone could enlighten me as to why funding providers enforce the "50%" rule when funding a new advance that is going to pay off a balance...

I keep running across merchants that were sold a 6-month advance at a 1.40 and now realize they overpaid and could qualify for an A or B paper lender. They don't really want/need more money but just want to pay off their remaining balance and have a lower daily payment.

For example, I have a merchant that received $60k at a 1.39 on approx 6-month deal. They are paying around $650 per day. Their balance is down to around $45k.

They would like to pay off the $45k with a new $45k advance but at a lower more reasonable rate--say 1.25 on a 6 month so daily payment could go down to approx $426 per day. However, funding providers all seem to say that they would have to qualify for 2x their balance, or $90,000 in this example. Why is this the case? Why does a funder insist on this? In many cases, the merchant can easily qualify for the $45k but not the $90k so is DQ'ed...why wouldn't the funder not want to do the deal at $45k and get a new reliable merchant on their paper?

Are there any funding providers out there that do NOT enforce this rule and allow 75% to 100% of proceeds to go towards payoff?