MCA Consolidation: Replacing Daily Payments With One Monthly Payment
MCA consolidation replaces two or more merchant cash advances with a single facility that pays them off at their current balances and moves the company from daily or weekly ACH draws to one monthly payment. For a business doing $5MM to $50MM in revenue, the realistic first step as of 2026 is an 18-36 month term loan priced around 18%-22% APR, closing in 10-20 business days, which typically cuts monthly debt service by 30%-50%. That is not a rate anyone brags about. It is the step that stops the daily extraction and buys the twelve months of clean payment history that qualifies the company for asset-based pricing in the low teens or better. Consolidation is a ladder, not a single leap, and any lender promising to land you at bank pricing in one move is selling you a fourth position.
A few questions, no credit pull, no obligation. Or call 770-820-7409.
Where this fits best
Our sweet spot is $5MM to $50MM in revenue on asks between $250K and $5MM. We work meaningfully smaller and meaningfully larger — we have closed $250K factoring lines and $50MM facilities in the same year. What usually decides fit is your credit, your existing debt, and whether the structure works at all. Size is the last thing we look at, not the first.
- •Sweet spot is $5MM-$50MM in annual revenue and two or more years operating — neither is a cutoff
- •Two to four active advances — not eight
- •Something a lender can underwrite against: commercial receivables, free-and-clear equipment, inventory, or equity in owner-occupied real estate
- •The advances trace back to a shock — a lost contract, a tariff hit, a payroll spike, a customer who stretched to net-90 — rather than to a business that stopped working
- •You can produce six months of bank statements and a current AR aging this week, not next month
What is actually going on
The daily draw is the part nobody explains properly at signing. A merchant cash advance is priced as a factor rate — 1.35 on $500K, say — which sounds like 35% until you notice the repayment window is nine months. Convert it and the true annualized cost lands somewhere north of 70%. Stack a second and a third position on top and the combined number moves into the triple digits, which is why a profitable company can be shipping product, winning work, and still unable to make payroll. What actually breaks is not the rate. It is the timing. Advances pull Monday through Friday regardless of whether your customer paid you, so a business on net-60 terms is funding somebody else float out of daily cash. Every dollar the advance takes on a Tuesday is a dollar not available for materials on Wednesday, and the usual response — take another advance to cover the gap — is what turns a survivable problem into a structural one. The phone calls start about the same time. Brokers buy lists of UCC filings, so the moment a funder files against your receivables you become a lead, and the pitch is always some version of consolidation. Read the term sheet closely and most of those offers are a larger advance at a higher factor rate: a fourth position wearing the word "consolidation," with five to ten points of undisclosed compensation built into the rate. It closes in 48 hours because nobody underwrote anything. A real consolidation looks different and takes longer. A lender taking out positions other lenders considered risky needs to see why repayment is realistic, which means a 13-week cash flow forecast, an explanation of what caused the stack, and ideally an asset to secure against. Ten to twenty business days, not two. The reward for the extra two weeks is that the daily draws actually stop.
How it works
Get the real payoff numbers
Not the original funded amounts — the current balances, the daily or weekly draw on each, and the remaining term. Most owners we talk to have never seen these side by side. This alone sometimes changes the plan.
Find the asset
Commercial receivables are the most common answer, then free-and-clear equipment, then inventory, then equity in owner-occupied property. The asset is what moves this from "another advance" to "a loan against something."
Build the file lenders actually need
Six months of bank statements, a current AR aging, existing advance contracts, and a 13-week cash flow forecast showing the new payment clears. The forecast is not paperwork theater — it is the document the credit committee argues over.
Take out two to four positions in one tranche
The lender wires the funders directly and gets written payoff letters, so the positions close rather than sitting dormant with a UCC still filed. If the stack is deeper than four, expect the first tranche to clear the most expensive positions and the rest to be addressed in sequence.
Twelve months later, refinance again — cheaper
This is the part that matters and the part nobody mentions. A year of clean monthly payments on the consolidation loan is what qualifies the company for an asset-based line, a non-bank SBA loan, or a bank facility in the low teens or better. The first step exists to earn the second.
Terms, costs and timelines
| Facility size | $250K - $10MM |
|---|---|
| First-step structure | Term loan, 18-36 months, monthly payments |
| First-step pricing (2026) | Roughly 18%-22% APR |
| Payment frequency | Monthly — no daily or weekly ACH sweeps |
| Time to close | 10-20 business days on a clean file |
| Positions taken out | Typically 2-4 in a single tranche |
| Typical debt service reduction | 30%-50% of current monthly outflow |
| Second-step target (12+ months later) | ABL, non-bank SBA, or bank line in the low teens or better |
| What underwriting requires | 13-week cash flow forecast, 6 months bank statements, current AR aging |
| Serve fee | A success fee, earned only on closing. Agreed in writing before you sign anything. No retainers, no upfront costs |
Consolidating through Serve vs. through the broker who called you
| The broker who found your UCC filing | Serve Funding | |
|---|---|---|
| Speed to an offer | 24-72 hours, because the offer is another advance and nobody underwrote it | 3-5 business days to term sheets, 10-20 business days to funding |
| What you are actually buying | A larger advance at a higher factor rate — a new position layered on top of the old ones | A term loan that pays the existing positions off at their balances and closes them |
| How the intermediary gets paid | Built into the factor rate rather than quoted separately, so you rarely see it | A success fee, agreed in writing before you sign and earned only if you close |
| Payment mechanics after close | Daily or weekly ACH continues, often at a higher draw | One monthly payment |
| Where your file goes | Shopped to twenty funders at once, which is how the next round of cold calls starts | Presented to the two or three lenders whose credit box actually fits, with your permission each time |
| When it does not fit | You are sold something anyway | We tell you it does not fit, and what would have to change for it to |
How this plays out, with numbers
A metal fabricator doing roughly $9MM in revenue loses a customer that represented about a fifth of the book. Payroll does not shrink on the same timeline as revenue, so over five months the company takes three advances totaling $780K. By the time we see it, the combined draw is about $4,100 per business day — call it $86K a month against roughly $95K of gross monthly margin. The business is profitable on paper and cannot fund a purchase order. The asset is the receivable book: about $1.6MM outstanding, spread across eleven industrial customers on net-45 to net-60, no single account over 18% of the total. That concentration profile is what makes the file workable. We structure a $850K term loan at 20% APR over 30 months, secured by the receivables, which pays all three positions off at their current balances and closes them. New monthly payment: about $38K. Monthly debt service falls by roughly 55%. Eleven months of clean payment history later, the same receivable book supports a $1.2MM asset-based revolving line at Prime plus 3.5%, which retires the term loan and leaves the company with a facility that grows as sales grow instead of a payment that shrinks as it amortizes. The first loan was never the destination. It was the thing that made the second one possible.
A representative structure, sized to a typical file. Details are generalized — we do not publish client specifics.
When this is the wrong answer
Half of being useful is being clear about what does not work. If one of these describes you, the honest path is below — and it may not run through us.
Conventional refinance math rarely closes at that size. A home equity line or a single-invoice advance is usually the only honest answer, and we will say so on the first call rather than run you through a diligence process that ends in a no.
A refinance does not reach that far. What is needed is a restructuring conversation — negotiating directly with the funders, or a formal workout — not more capital. We can point you toward counsel that does this work.
Without commercial invoices there is no receivable to secure a takeout against, so a conventional consolidation is harder. That does not mean there is nothing here — inventory, equipment and card-processing history all get financed, and our e-commerce and DTC guide covers what actually works. Worth a conversation rather than an assumption.
That is stacking, and it is exactly how a two-position problem becomes a six-position one. If this week is the emergency, say so and we will tell you honestly whether anything real can close in time.
