Consolidating short term and unsecured business debt is one of the most frequent requests we get in the cash advance industry. Replacing existing cash advances with other products that lower the merchant’s indebtedness is often extremely difficult. If someone doesn’t already qualify for a bank loan or other secured loan option, they are going to have a tough time finding anything in the unsecured industry.
One option that has become more popular, and accessible, is reverse consolidation programs. Reverse consolidations can pay off multiple existing cash advance positions and free up a great deal of a merchant’s cash flow. Here’s how it works.
Let’s say merchant has 3 cash advances that they pay 5 days a week. A reverse consolidation loan will be disburse enough every week for the merchant to make those cash advance payments, and will only be paying down the replacement amount from the reverse consolidation lender. Merchants will therefore be spending far less every day paying their existing loans because the reverse consolidation is taking care of those payments.
If they’re not too over extended, a reverse consolidation may still allow the merchant to net some extra cash, but it’s usually not as much as a traditional replacement advance. Still, on average they will save a great deal more by removing multiple, expensive, daily payments, and replacing them with one. It also avoids keeping merchants in a situation where they have no other options but to renew multiple cash advances, which constantly adds to the businesses’ over-all indebtedness.
Many cash advance lenders have been expanding their reverse consolidation programs in 2018, and it remains a unique opportunity for small businesses to manage their unsecured, short term debt. Contact Main Street Finance Group today to find out if your business qualifies for a reverse consolidation program.