Evaluating a consolidation offer —
10 questions to ask.
Every consolidation offer leads with the new, lower payment. That's the part you want to hear — and the part that tells you least. These ten questions tell you the rest.
1. What is the total payback?
Not the payment — the total. Then add up what you'd pay by finishing your current advances as agreed. The difference is the price of the relief. On the real four-position offer we walked through in Does MCA consolidation save money?, finishing the existing advances cost $41,545; the consolidation cost between $56,709 and $65,433, depending on the rate.
2. How much lower is the new payment, really?
Compare it with what you pay today across every advance, on the same schedule — daily with daily, weekly with weekly. If the offer switches the schedule, convert before comparing.
3. How long does the relief last?
This is the question most offers don't answer. Your current payments drop each time one of your advances finishes, while the new payment stays the same. In the example above, the relief built to about $3,676 by week 7 and was used up by week 18. Run your own numbers in the consolidation calculator.
4. Who pays off the old advances, and how?
In a standard consolidation, the new funding company pays each one directly using payoff letters. In a reverse consolidation, it deposits enough each week to cover their payments until each finishes — ask for that deposit schedule in writing, advance by advance.
5. What happens if a deposit is late or stops?
Specific to reverses: your old advances keep debiting whether or not the deposit arrived. Ask what the agreement says the funding company must do, and what happens to your payment if it doesn't.
6. What is the fee?
Look at the total funding against your combined balances. The gap is the funding company's fee — on the offer above it was about 5%. It should be built into the funding and disclosed, never collected from you before funding.
7. Is there an early payoff discount?
If your business recovers, can you pay the new advance off early for less than the full payback? Some agreements offer a discount; many don't. Get it in writing if it's promised.
8. Can the payment be adjusted if sales drop?
Many merchant cash advance agreements include reconciliation — a way to adjust the payment to your actual sales. Check that the consolidation agreement has it, and how to ask.
9. What counts as a default, and what can happen then?
Read the default section: what triggers it (including taking other financing), whether there's a personal guarantee, and what the funding company can do. Our MCA contract guide shows where to look. If anything is unclear, ask a lawyer before signing.
10. Did you get the disclosures your state requires?
Several states require a written disclosure of cost and terms on commercial financing. The state-by-state disclosure guide explains which apply.
Red flags
- A fee you have to pay before anything funds.
- No total payback in writing — only a payment.
- Payoff money sent to you instead of to your existing funding companies.
- Pressure to sign the same day, or to stop paying your current advances.
- A refusal to answer how long the relief lasts.
When you bring us a consolidation offer — ours or anyone else's — David will walk through these ten questions with you, and tell you plainly if the numbers don't work.
Questions worth answering.
More in this guide
Everything a business owner with more than one merchant cash advance should know before consolidating, in the order we'd explain it.
Start here: MCA ConsolidationHow consolidating multiple merchant cash advances into one payment works, and when it doesn't.- 1What Is Stacking — and Why It Hurts MerchantsWhat it means to carry several MCA positions at once, and why the daily math gets worse with each one.
- 2Understanding Daily RemittancesHow daily MCA debits are set, and what they do to your cash flow when they stack up.
- 3Daily vs Weekly MCA PaymentsSame total payback, different cash flow: which schedule suits which business.
- 4The Stack Test: 7 Signs You're About to Be DeclinedThe warning signs underwriters look for in a file with multiple positions.
- 5Can You Get Funding With Existing MCA Positions?How underwriters read a file that already has advances, and the four options to compare.
- 6Understanding Reverse ConsolidationWhen a payoff isn't possible: weekly deposits cover your existing debits while you pay one lower daily.
- 7MCA Consolidation vs RefinancingRenewal, consolidation and reverse consolidation: how each works and what each costs.
- 8Does MCA Consolidation Actually Save Money?The week-by-week math on a real four-position offer: how much relief, for how long, at what cost.
- 9How to Evaluate an MCA Consolidation OfferYou're reading this
- 10How to Read an MCA Contract Line by LineThe clauses that decide whether a consolidation or payoff is even possible.
- 11Business Line of Credit vs MCAA side-by-side cost comparison, for when a line of credit could replace the advances.
- 12How to Stop MCA StackingThe structural and behavioral fixes that keep a business out of the cycle afterwards.
- 13How to Recover from Business DebtThe broader recovery plan when consolidation alone won't fix it.
Lead with discipline.
Fund with Legion.
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Vires acquirit eundo — it gathers strength as it goes.