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MCA debt relief

MCA Debt Relief: Two Real Exits, and Your File Decides Which One

Everything else sold to a struggling business is a variation on borrowing again. This page lays out what restructuring and settlement each do, what they cost, how long they take, and what the alternatives look like once you read past the sales page.

See where you stand

Two paths

Restructuring and settlement, side by side

They are not steps in a sequence and one is not the upgrade of the other. They answer different questions, and the answer you get depends on whether the funder still believes the original schedule can be met.

Restructuring

Keep the position. Change the schedule.

Who it is for
A business still open, still taking in revenue, still remitting, where the schedule written into the contract has outrun what the receipts support. Positions that are current, or only recently behind, negotiate best.
What actually changes
The frequency and the size of the remittance. A daily debit becomes a weekly or biweekly payment sized to what the account can absorb. The funder keeps the position on its own books and services it under the new terms.
What it costs the business
The balance usually survives intact. You repay what the agreement says is owed, over a longer stretch, and most funders will not advance again to a business while a modified schedule is running.
Realistic timing
Funders commonly answer a complete package within 1 to 3 weeks. Moving several positions onto new terms at once tends to run 30 to 90 days, longer when one company holds out while the others sign.
How a restructure gets built

Settlement

Reduce the balance. Close the position.

Who it is for
Positions already in default, or moving there quickly enough that the funder has given up on the original schedule. It also fits files that have been handed to a recovery agency or referred out to counsel.
What actually changes
The balance itself. The funder agrees to take less than the face amount as payment in full and signs a release that says so, along with a commitment to clear the lien it filed at funding.
What it costs the business
The position defaults before it settles, and that follows a company through the funding world for a while. The money has to come from somewhere. Forgiven amounts can be reported to the IRS, which belongs in front of your accountant early.
Realistic timing
A defaulted file still sitting with the recovery desk of the funder itself can close in 30 to 60 days. Once outside counsel or a filed suit is in the picture, 2 to 6 months is the more honest range. Settlements paid over time usually run 6 to 18 months to completion.
How a settlement is negotiated

On the settlement side, negotiated resolutions have historically landed in the range of 40 to 60 cents on the dollar. That describes past negotiations across many files and many funders, not an offer, a projection or a promise about your positions.

Results vary and are not guaranteed. Figures describe past negotiations and do not predict the outcome of any individual case. No result is promised or implied.

Restructuring

Three steps to a schedule the account can absorb

Most of this happens away from you. What we need from you is documents and honesty about the numbers.

  1. Read every agreement

    We pull the full contract set, the remittance history and the bank activity, then map what each funder is actually entitled to. The reconciliation language matters far more than anything in the pitch that sold the advance.

  2. Build and submit the package

    Funders decide on paperwork. Statements, receipts, a written account of what changed inside the business, and a proposed schedule the numbers can support. A thin package earns a fast refusal.

  3. Negotiate the terms and paper them

    We work each funder toward a payment the business can carry, then get the modification signed. Nothing moves on new terms until the new terms exist in writing.

Settlement

Four steps to a negotiated payoff

Settlement work is slower and more procedural than restructuring, because the funder has to be convinced that a reduced number today beats what it could collect later.

  1. Inventory the positions

    Every open advance, what has been remitted against it, what the funder claims remains, and where the file physically sits: in house, with an agency, with outside counsel, or sold to a buyer.

  2. Establish what can be funded

    An offer is only as strong as the money standing behind it. We work out what is available now and what a short plan could carry before anyone puts a number in front of a funder.

  3. Negotiate and substantiate

    Offers, counteroffers, and the documentation funders ask for along the way. Where a company has already sued, the litigation posture and the negotiation move together rather than in separate lanes.

  4. Close it in writing

    A signed agreement naming the amount, the schedule, the release, the lien termination and what a missed payment triggers. Payment follows the paper. Never the other way around.

Results vary and are not guaranteed. Figures describe past negotiations and do not predict the outcome of any individual case. No result is promised or implied.

Who this program is built for

A shop owner on the phone at the counter of a small store
Owners with a real business underneath the debt: a shop, a fleet, a practice, a crew. That is who the program is sized for.

We take on businesses carrying at least $20,000 across their open advance positions. That floor is not arbitrary. Below it, the cost of a negotiated resolution rarely beats what an owner can accomplish with a direct call and a clean set of statements, and we would rather hand you the reading than sell you a program you do not need.

You also have to currently hold one or more merchant cash advances. This is not a general business debt service. Term loans, equipment leases, corporate cards and tax liabilities each behave differently under pressure, and a shop that treats them all as one pile is not paying attention. If advances sit inside a larger set of obligations, tell us what else is on the books so the plan accounts for it rather than pretending it away.

Services are not available in all states, and the rules governing this work differ meaningfully from one state to the next. On the first call we will tell you plainly whether your business sits inside the footprint. If it does not, you will hear that instead of a pitch.

Services are not available in all states.

The full menu

Every option on the table, including the ones we do not sell

Five routes get pitched to businesses in advance trouble. Here is what each one does, who it actually suits, and the part the marketing tends to leave out.

Comparison of merchant cash advance relief options
Option What it does Who it fits What to watch for
Restructuring Renegotiates the remittance schedule on an advance you already hold. Same funder, usually the same balance, different timing and a smaller payment. A business generating real revenue that can carry a payment, just not the one written into the contract. The total repaid rarely shrinks. Stretching a schedule can mean paying the same money over 3 to 4 times as long.
Settlement Negotiates a defaulted balance down to a figure the funder accepts as payment in full, then documents the release and the lien termination. Defaulted positions where the business has, or can raise, a lump sum, or can fund a short structured plan. Funding relationships take the hit, forgiven amounts can be reported to the IRS, and the release language has to be signed before money moves.
Consolidation Replaces several obligations with one new obligation, ideally at a longer term, a lower cost of capital and a single payment. Businesses whose financials still qualify for genuine credit, meaning a bank product or an SBA loan rather than another advance. Most consolidation marketed to distressed advance holders is not bank credit. If the replacement is another advance, the cost of capital goes up rather than down.
Reverse consolidation A new company deposits money into your account on a set cycle so the existing daily debits keep clearing, while you repay that company on its own schedule. Very few businesses. It is sold as breathing room during a cash crunch, and occasionally it buys a short runway to a real fix. This is usually new debt dressed as relief. The old positions stay open, a fresh position lands on top, and the total obligation grows. Price the full term of the new deal before signing anything, not the weekly deposit.
Bankruptcy A federal court process. Chapter 11 and Subchapter V reorganize business debt under supervision. Chapter 7 liquidates and closes. Businesses where the load cannot be serviced under any schedule, or where litigation has moved past the point negotiation can reach. Cost, disclosure and loss of control are all real. It is a legal proceeding and belongs with a bankruptcy attorney, not a debt company. We will say so when we think it deserves a seat at the table.

We only do the first two. The other three are listed because owners get called about them every week, and knowing what a reverse consolidation actually is tends to be worth more than another sales conversation.

After a missed payment

What actually happens once a business falls behind

Owners are rarely told this in order, so it arrives as a series of surprises. Every range below varies by contract and by state. Two businesses that miss the same debit on the same morning can be in very different places sixty days later.

  1. 01 Days 1 to 5

    The first returned debit

    Your bank charges a returned item fee and the agreement adds a rejected payment fee of its own, commonly $35 to $100 per attempt. Some funders re-present more than once in the same week, so a single short morning can produce several charges. The servicing calls begin here.

  2. 02 Week 1 to 4

    Default is declared

    Advance agreements define default broadly. A returned remittance, a changed bank account, or taking a new position without written consent can each qualify on their own. Once the funder declares it, default fees attach and the acceleration provision becomes available.

  3. 03 Week 2 to 8

    Acceleration and the personal guaranty

    Acceleration makes the entire remaining purchased amount due at once instead of across the schedule. The performance guaranty most owners signed at funding is the route from the business to the individual, and this is the point where funders start using it.

  4. 04 Week 3 to 12

    Lien enforcement

    The UCC-1 filed when the money landed usually covers receivables and often reaches every business asset. Funders enforce it by notifying your payment processor, and in harder cases by sending notices to your own customers directing them to remit to the funder instead of to you.

  5. 05 Month 1 to 12

    Suit and judgment

    Venue is set by the contract and is frequently a state you have never operated in. Older agreements sometimes included judgment paperwork signed at funding, and while state law has narrowed how and where that can be used, the underlying speed of these cases has not changed much.

  6. 06 After entry

    Collection on the judgment

    Bank account restraints, levies against receivables, liens on property where state law permits, and post-judgment discovery into the finances of the business and sometimes the guarantor. This is the stage that ends companies, and it is also the stage that is hardest to unwind.

None of this is an argument for missing a payment, and we will never tell you to. It is an argument for calling someone before the second stage, while the funder still has a reason to negotiate rather than enforce.

How we get paid

Fee structure is the fastest way to tell a serious shop from a bad one, so it does not belong buried on page four of an agreement.

Our fee structure

[PLACEHOLDER: fee model]

Two commitments sit behind that number. We do not demand a large payment before work has been done on your file, and the entire structure is put in front of you in writing on the first call, before you decide anything at all.

When you talk to anyone in this industry, ask three questions: what the fee is, when it is earned, and what happens if a funder refuses to move. A company worth hiring answers all three without hesitating and without changing the subject to how fast you need to sign.

Questions

What owners ask once they get past the first call

Can I restructure some positions and settle others?

Yes, and that combination is common. A cooperative funder holding a current position may agree to new terms while a defaulted position with a different company is negotiated down. The plan follows the file rather than a single label applied to everything.

Do I keep talking to the funders, or do you?

Once you sign an authorization, the calls move to us. You can still speak to anyone you want at any time, but you no longer have to, and most owners tell us that change alone alters how the week feels.

Will any of this show up on my personal credit report?

Merchant cash advances are generally not furnished to the consumer credit bureaus the way a card balance is. That is not the same as no consequence. Defaults circulate through the databases the funding industry keeps on its own, judgments are public record, and a personal guaranty puts the individual within reach. We walk through what applies to your specific positions.

What happens to the personal guaranty I signed?

Most advance agreements carry a performance guaranty rather than a full payment guaranty, meaning the owner is exposed if certain conduct occurs rather than simply because the business ran out of money. The wording varies from contract to contract, and it is one of the first things we read on every file.

How many positions is too many?

There is no fixed number. We have seen a business with two positions in worse condition than a business with six, because what matters is the total remittance measured against gross margin. When the pulls exceed what the company earns above cost, no schedule fixes it, and we will tell you that on the first call.

What documents do you need to look at my file?

The funding agreements themselves, three to six months of business bank statements for every account, processing statements if you take cards, and a list of open positions with balances and current remittance amounts. If a funder has filed suit, we also need the filed papers and any date that has already passed.

A funder has already sued. Is it too late to do anything?

No, though the clock starts the day you are served and a missed deadline turns a defensible case into a judgment. We handle MCA lawsuits as part of the file, and your case is reviewed by experienced MCA defense counsel. First American Debt Help is a debt settlement company and does not provide legal representation directly.

What if I would rather handle this myself?

Then we will point you at the parts that carry the most weight: your reconciliation clause, your specified percentage, and the gap between what a funder is owed and what it is demanding. Plenty of owners negotiate their own outcome. The reason to hire anyone is time and leverage, not secret access.

Next step

Find out which path your file supports

Two questions about your advances and a look at the agreements is usually enough to tell you whether restructuring or settlement is the realistic route. Free, confidential, no obligation.

About a minute

  • Two questions about your positions
  • No documents, no credit pull
  • Nothing that touches your file
See if you qualify

Services are not available in all states.

See if you qualify