Reverse consolidation orrestructuring?
Both are pitched to owners with stacked merchant cash advances. One adds a new advance; the other renegotiates the ones you already have.
Key points
- A reverse consolidation is a new advance layered on the stack, not a payoff of it.
- With a reverse consolidation, every original funder keeps drafting until its balance is paid.
- Restructuring changes an advance only when that funder signs new written terms.
- If a lawsuit has been served or a judgment entered, a licensed attorney comes before either option.
How does each one work?
A reverse consolidation is sold as relief from stacked drafts. A new funder advances money in weekly installments, enough to cover some or all of your existing MCA payments, and in return drafts its own payment, often weekly and smaller than the combined drafts it is covering. Your week gets easier at first. The old contracts are untouched: every original funder keeps drafting until its balance is paid, and the new advance has its own factor rate, its own term, and usually its own UCC-1.
Debt restructuring works on the advances you already have. Each funder is approached on its own, with your contracts and bank statements, to agree new written terms: a different cadence, a smaller payment, a longer schedule, or a combination, sized to what the business actually deposits. No new money is borrowed. Nothing changes on a position until that funder signs, and no funder is required to.
Anchor Resolve does not sell reverse consolidations or arrange new advances of any kind. In Anchor Resolve’s program, a servicing partner’s negotiation team works with each funder on the client’s behalf. Results vary and no outcome is guaranteed.
Reverse consolidation and restructuring, side by side
| Question | Reverse consolidation | Restructuring |
|---|---|---|
| Is it new debt? | Yes. It is a new advance with its own factor rate and its own contract. | No. The existing advances are renegotiated; no new advance is taken. |
| Do the old drafts stop? | No. They keep drafting; the new funder deposits money to cover them. | Each one changes only when that funder signs new terms. |
| What happens to total exposure? | It usually grows, because the new advance carries its own cost. | It does not grow from new borrowing; the schedule is what changes. |
| Liens | A new lien is usually added on top of the existing ones. | Existing liens stay until each balance is resolved and a UCC-3 is filed. |
| Who must agree? | Only the new funder. | Each existing funder, one at a time. None is required to agree. |
| If revenue drops again | The new payment and the old drafts are both still due. | The new terms are sized to deposits, but a missed payment can still be a default. |
The reverse consolidation guide shows the week-by-week money flow, and the restructuring page shows what a renegotiated schedule can and cannot do.
When does each one fit?
A reverse consolidation can only help if the business’s revenue will recover before the new advance and the old ones together outrun it, because for a period you are paying both. Before signing one, ask for the total payback on the new advance, the weekly amount it will draft, how many weeks it will fund, and what happens to its draft if your old funders change theirs. Get the answers in writing.
Restructuring fits a viable business whose deposits could carry the debt on a schedule that matches them, just not on today’s daily and weekly drafts. It takes longer to set up, because each funder decides separately, and while talks go on each funder keeps its contractual rights.
Neither fits when a lawsuit has been served or a judgment entered: a licensed attorney comes first. Sometimes a bank refinance or bankruptcy is the honest answer, and the four-way comparison sets those out.
Common questions
Does a reverse consolidation pay off my existing advances?
No. It deposits money to cover your existing drafts, and each original advance keeps drafting until its own balance is paid. It is a new position with its own cost and usually its own lien.
Is restructuring the same as taking a consolidation loan?
No. Restructuring involves no new borrowing. Each existing funder is asked to agree new written terms on its own advance, and nothing changes on that advance until the funder signs.
Does Anchor Resolve offer reverse consolidations?
No. Anchor Resolve does not lend money, broker advances, or arrange reverse consolidations. In its program, a servicing partner’s negotiation team works with your existing funders on your behalf. Results vary and no outcome is guaranteed.
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