[Chambo]

I have a client who wants to work with a "debt consolidation" firm. They renegotiate his terms for him, and pay him, and they pay out to the direct lenders.

He has 8 positions out. Grosses $900k-1mm monthly, nets about 300k due to multiple loans from ABLE and MCAs and a bank loan. Has $4.1mm out in receivables.

He's feeling the pinch of too much stacking, but he doesn't want to close the door for the future funding through MCAs. No negative days, but it's getting overwhelming.

If he starts working with one of these companies, does he get blacklisted from future lenders? Or should I direct him to a company like Dan Page to just really consolidate himself and get an MCA product?

Debt Consolidation companies get the merchant to stop paying. then after a couple months, they would call up the MCA, and offer a settlement of .05 (yes 5 cents) on the dollar. See, they are paid based on the saving to the merchant,s o the lower they get the settlement for, the more they make.

In the end, the merchant may end up saving 25-35% on this debt. The Consolidation company makes an additional 25-30% of the outstanding debt balance.

[Andy]

Debt Consolidation companies get the merchant to stop paying. then after a couple months, they would call up the MCA, and offer a settlement of .05 (yes 5 cents) on the dollar. See, they are paid based on the saving to the merchant,s o the lower they get the settlement for, the more they make.

In the end, the merchant may end up saving 25-35% on this debt. The Consolidation company makes an additional 25-30% of the outstanding debt balance.

The part of this that is missing- merchant stops payment, goes in default. The funders refuse to negotiate with these debt consolidation firms offering a joke of a settlement. The funders file lawsuits/COJ and seize receivables and assets, and company goes out of business.

And all could've been avoided if the merchant simply called the funders himself, and said hey I'm struggling with the payments can you please lower them a little. After all, if a merchant bounces payments its not good for the merchant or the funder. If the payments strangle the businesses cash flow and they go out of business, the funder loses too.