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MCA restructuring

The schedule is the part of an advance that can still be renegotiated

An advance is priced as a fixed amount owed and delivered as a pull that takes it every morning. Restructuring leaves the first half alone and rewrites the second. Here is the clause that makes that possible, the package funders read, and where the approach runs out of room.

See if your file supports it

What a restructure actually converts

Most advance agreements take a set dollar amount every business morning, or a share of each day's card batch, until the purchased amount is satisfied. A restructure replaces that cadence with a figure the account can absorb: smaller, fixed, and moved to weekly or biweekly.

The purchased amount usually does not move. The funder is not conceding it is owed less. It is deciding it would rather collect the same sum slowly from a company still trading than accelerate against one that has stopped clearing. That calculation is the whole negotiation, and it is why a restructure is easiest to get while a position is current.

What a business gets in exchange is predictability. A fixed weekly figure can be budgeted against payroll and inventory. A daily pull cannot, because it moves with the batch and lands alongside everything else.

The mechanism

Reconciliation is a contract right, not a favor

Advance agreements are written as a purchase of future receivables at a discount rather than as a loan. That structure only holds if the amount collected tracks the receivables, and the clause that makes it track is reconciliation.

What the clause says

Typical language gives the business the right to request, usually monthly and in writing, that the funder recalculate the remittance against the specified percentage of actual revenue for the period just closed. Collect less than projected and the remittance comes down, with the overage credited or refunded.

Two things make the clause fail. Most owners never read it, so it is never invoked. And the right is conditioned: a written request, sent to a named address or portal, inside a stated window, with the listed documents. Miss the form and a funder declines on procedure without ever reaching the merits.

What funders ask for

Bank statements
Three to six months for every operating account, as the bank issues them. Screenshots and spreadsheet exports get sent back.
Processing statements
The same period where the advance is tied to card volume. This is how a funder checks the specified percentage against reality.
A revenue schedule
Month by month, reconciling deposits to actual sales, with transfers, refunds and chargebacks identified rather than buried in a total.
An account of what changed
The lost contract, the equipment failure, the season that never arrived, with whatever supports it. Funders read this part.
A proposed schedule
A specific figure at a specific frequency, with the arithmetic shown. Asking to simply lower the payment is not a proposal.

Worked example

What the conversion looks like in numbers

The figures below are a hypothetical built from terms common in advance agreements. They illustrate arithmetic. They are not a case, an average, or a projection about any business.

Hypothetical, before

Amount advanced
$150,000
Purchased amount owed
$210,000
Daily remittance
$1,750
Remitted so far
$105,000
Balance the funder claims
$105,000
Cost per month
about $37,000

Hypothetical, after

Balance the funder claims
$105,000
Fixed weekly payment
$2,500
Weeks to completion
about 42
Cost per month
about $10,800
Left in the account monthly
about $26,200

Read the columns together and the trade is plain. The balance did not shrink by a dollar. The business still repays the full $105,000 the agreement says is owed, over roughly ten months instead of three. What changed is that about $26,200 a month stays in the operating account.

That is also the honest cost. Time on the obligation goes up, and a funder running a modified schedule is generally not advancing again while it lasts.

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.

The sequence

Three steps from a signed agreement to a signed modification

Very little of this happens in front of you. What the process needs from an owner is documents on time and straight answers about the numbers.

  1. Read the agreement before anyone picks up a phone

    The specified percentage, the reconciliation language and its notice terms, how default is defined, and what the contract says about taking another position. Most of the leverage in this work is already in the paperwork.

  2. Assemble and file the reconciliation package

    Documents, revenue schedule, written explanation and a proposed remittance, delivered the way the contract requires, to the address it names, inside the window it sets. Procedure defeats more requests than merit does.

  3. Negotiate the terms, then paper them

    Approval, counter or refusal, sequenced across funders so one signature is not undone by another company accelerating. Nothing changes until a signed modification names the amount, the frequency, the term and what a missed payment triggers.

Fit

When this approach works, and when it does not

Restructuring answers one question: can this business carry a payment this funder would accept. When the answer is no, saying so early beats a package nobody approves.

Conditions that support a restructure

  • The business is open, operating and still generating deposits a funder can see.
  • The position is current, or the arrears are recent and documented.
  • The funder services its own paper and runs a workout desk.
  • Something specific and provable moved revenue, rather than a general sense that things are tight.
  • The proposed payment survives the worst month of the year, not the best.

Conditions that rule one out

  • Several positions have already defaulted and at least one funder has accelerated the balance.
  • Revenue has not dipped, it has collapsed, and no schedule fits what the company now earns.
  • The file has been sold to a debt buyer or referred to outside counsel.
  • Total remittance across all positions exceeds gross margin, so a new schedule only redistributes an impossible number.
  • Judgment has been entered and the funder is collecting rather than negotiating.
Where a defaulted position goes instead

Services are not available in all states.

The limits

Three things a modification does not do

Each of these gets sold as part of the package somewhere in this industry. None is true, and an owner who signs expecting them is going to be surprised twice.

  1. 01

    It does not reduce the principal balance

    A modification changes the schedule, not the arithmetic. The purchased amount written into the agreement stays the purchased amount, repaid across a longer stretch, sometimes three or four times longer than the original term.

  2. 02

    It does not terminate the UCC-1

    The financing statement filed when the money landed stays on record for the life of the position, and it keeps appearing whenever a bank, a lessor or another funder searches your name. It comes off when the obligation is satisfied and the funder files a termination.

  3. 03

    It does not release a personal guaranty

    The performance guaranty signed at closing survives the modification. If the new schedule is missed and default is declared, that document is still the route a funder uses to reach the person who signed it.

A restructure buys room and time. Anyone describing it as a way out of the balance is describing settlement, which is a different process with a different set of consequences.

Questions

What owners ask about renegotiating a schedule

Can I invoke reconciliation myself without hiring anyone?

Yes. Find the clause, follow its notice terms exactly, and send the request in writing with the documents the agreement lists. Owners do this successfully every week. The reasons to bring someone in are time, several funders needing the same package at once, and a company that ignores requests.

My agreement does not seem to have a reconciliation clause. Now what?

Some agreements bury it inside a definition and a few leave it out. Its absence removes a lever, not the conversation. Negotiation then rests on what a funder recovers from a cooperating business compared with what enforcement actually returns.

Will a restructure show up when another funder looks at my file?

Assume yes. Advance companies share information through industry databases and broker networks, and most decline to fund a business running on modified terms. For a company trying to get out from under the position it has, that is the point rather than the cost.

How long do funders take to answer?

A complete package commonly draws a decision in 1 to 3 weeks per funder. An incomplete one takes far longer, because the clock restarts every time someone asks for a missing statement. Several positions at once is realistically a 30 to 90 day project.

What if only some of my funders agree?

A common outcome. A partial restructure is worth having when the arithmetic works with the holdouts still pulling at contract rate. Where it does not, the positions that refused tend to move toward settlement while the modified ones stay on their new schedule.

Can the remittance go back up later?

Yes, and it is usually written in. Reconciliation runs in both directions, and many modifications include a review point or a step up tied to revenue recovering. Read what triggers an increase and how much notice you get before it lands.

Next step

Find out whether your agreement gives you room

Send the contracts and a few months of statements. We will tell you what the reconciliation language actually entitles you to. Free, confidential, no obligation.

About a minute

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