What is Consolidation & Recapitalization?
Debt refinancing replaces high-cost debt, whether stacked MCAs, expensive term loans or multiple monthly payments, with a single cheaper product, typically closing in 10–20 business days. As of 2026, typical outcomes are monthly debt service cut by 30%–50% and all-in rate reduced by 5–10 percentage points. One staffing agency we worked with went from $15K/month in MCA fees to $8K/month on a term loan, freeing $7K monthly for growth.
How It Works
Debt refinancing replaces high-cost debt, most commonly stacked merchant cash advances and expensive term loans, with a single, lower-cost product. As of 2026, typical outcomes are a 30–50% reduction in monthly debt service and a 5–10 percentage point drop in the all-in rate. Closings run 10–20 business days.
Merchant cash advances are particularly difficult to escape because they take daily or weekly draws directly from sales. Businesses that stack two, three, or more often discover that the combined true APR sits between 50% and well into the triple digits. The first goal of refinancing is to stop the daily bleed and replace it with a manageable monthly payment.
Getting out is rarely a single leap. The realistic path is a sequence of steps. The first move is usually a true-term loan with monthly payments over roughly two years, in the 18–20% APR range. The rate is not impressive in isolation, but it stops daily cash extraction overnight and creates a clean payment history. Twelve months later, that history opens the door to a cheaper product, typically asset-based lending, a non-bank SBA loan, or a bank facility. Each step moves the business closer to bank-grade pricing.
A real refinance lender is taking on debt other lenders considered risky and pricing it lower because they see a viable business underneath. To make their case work, we typically prepare a 13-week cash flow forecast, a clear math-based explanation of why repayment is realistic, and ideally a piece of collateral the lender can underwrite against: receivables, real estate equity, free-and-clear equipment, or in some cases clean owner credit.
Refinancing is not always possible. When a business is several MCAs deep with no commercial receivables, no real estate equity, and a damaged credit profile, conventional refinance math will not work. In those cases the honest answer is sometimes a home equity advance on the owner's residence if available, or a structural reset rather than a refinance. We will say so directly rather than promise an outcome we cannot deliver.
Quick Facts
| Facility / Loan Size | Deal sizes from $250K to $10MM+, with smaller deals (sub-$100K) usually requiring a HELOC or Home Equity Advance instead |
|---|---|
| Cost of Capital | Better second-step refi (12+ months later): asset-based line, ABL, or non-bank SBA at single-digit to low-teens rates |
| Best For |
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Key Features & Benefits
Consolidates multiple MCAs, expensive term loans, and overlapping credit lines into a single product
Typical first-step refi: true-term loan, monthly payments, 18–36 month term, roughly 18%–22% APR
Better second-step refi (12+ months later): asset-based line, ABL, or non-bank SBA at single-digit to low-teens rates
Monthly debt service typically reduced 30%–50% on the first refi step
All-in cost of capital typically drops 5–10 percentage points versus a stacked MCA position
Deal sizes from $250K to $10MM+, with smaller deals (sub-$100K) usually requiring a HELOC or Home Equity Advance instead
Close in 10–20 business days for clean profiles; longer if a real estate or asset appraisal is in the path
Will sometimes take out 2–3 MCA positions in a single tranche; rare to take all positions if the stack is six-plus deep
Will sit subordinate to an existing SBA 7(a) loan. SBA lenders usually consent to subordinate for an AR-backed working capital tranche
Real-estate-backed bridge structures available where owner has free-and-clear property or significant home equity
A 13-week cash flow forecast and a math-driven recovery plan are practically required to get to a yes
Spot/single-invoice factoring exists at 3% flat for 30 days for sub-prime borrowers needing one-off liquidity
No more daily or weekly sweeps, and payments shift to monthly on the better products
Terms, costs and timelines
| First-step structure | Term loan, 18-36 months, monthly payments |
|---|---|
| First-step pricing (2026) | Roughly 18%-22% APR |
| Payment frequency | Monthly, with 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 |
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.
Consolidation & Recapitalization - Common Questions
Get answers to the most common questions about consolidation & recapitalization
See It In Action
Real companies using Consolidation & Recapitalization to solve their capital challenges
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How It Compares
Side-by-side breakdowns of Consolidation & Recapitalization against the structures it most often competes with
Other Funding Solutions
Working Capital Loans & Lines of Credit
A working capital loan is short-term, revenue-based financing of $100K to $10M+ that funds in 2 to 10 business days, priced at 1.25%–4% per month. As of 2026, it's the fastest way to cover payroll, inventory, or growth-driven cash gaps when a bank can't move quickly enough, and at the same speed as a merchant cash advance it costs roughly half as much because the payment is monthly rather than a daily extraction from sales.
Learn more about Working Capital Loans & Lines of Credit →Invoice Financing
Invoice factoring is the practice of selling unpaid B2B invoices to a factor for 75%–95% of face value within 24–48 hours, then receiving the balance (minus a 0.25%–1% fee per invoice) when the customer pays. As of 2026, pricing typically runs Prime + 1–6%, facility sizes range from $250K to $100MM, and the facility scales automatically with sales. Approval looks at your customers' credit rather than your tax return, which is why it works for growing companies whose financials don't yet tell the full story.
Learn more about Invoice Financing →Equipment Leasing
& Financing
Equipment leasing and financing covers $100K to $50MM+ of machinery, vehicles, or technology over 3–7 year terms, with advance rates of 70%–85% of liquidation value and pricing of Prime + 3–10%. As of 2026, financing the asset directly is almost always cheaper than drawing on a working-capital line for the same purchase. Sale-leaseback structures let you extract 50%–70% of the equity from equipment you already own without adding a new debt covenant.
Learn more about Equipment Leasing & Financing →