MCA Consolidation: When It Helps and When It Buries You

Consolidation is sold as relief: one payment instead of five, more room in the bank account, breathing space. Sometimes it is exactly that. Often it is a more expensive advance wearing the word "consolidation."

The math nobody shows you

Say you have three advances with $90,000 of remaining purchased amount and $1,800 a day going out. A consolidator offers to pay them off with a new advance: $90,000 funded at a 1.42 factor rate over 12 months.

• New total repayment: $127,800
• Daily payment: about $490 — a 73% drop
• Extra dollars paid versus finishing the originals: $37,800

The daily payment fell by two thirds. The cost of the debt went up by nearly forty thousand dollars. Both statements are true, and only one of them appears in the sales call.

When consolidation is the right call

• You are stacked with three or more positions and the daily debits exceed what the business can produce.
• The alternative is missing payments, which means default, the personal guarantee, and UCC enforcement.
• The new product is an actual term loan with a stated APR, not another factor-rate advance.
• The consolidator pays your existing funders directly and you see the payoff letters.

When it buries you

• Your existing advances are close to finished — you would be paying a new factor rate on nearly-repaid money.
• The offer leaves some positions in place, so you now have the old debits plus a new one. That is stacking, not consolidating.
• There is an upfront fee before funding. Legitimate funders get paid out of the deal.
• Nobody will put the total repayment amount in writing.

Six questions to ask before you sign

• What is the total dollar amount I repay, start to finish?
• Is this a loan with an APR or an advance with a factor rate?
• Which of my current positions get paid off in full, and will I see the payoff letters?
• What fees come out of the funding amount?
• Does the new contract contain a confession of judgment or a personal guarantee?
• Is there a reconciliation clause if my revenue drops?

Run both scenarios — finishing your current advances versus the consolidated one — through Gradino's free calculator before you decide. If the total repaid is higher and your cash flow is not actually in crisis, consolidation is costing you money to feel better.

Common questions

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