This year I've seen many merchants who, for different reasons have needed to "stack" two or more short term working capital loans on top of each other. Maintaining multiple daily (or weekly) payment draws can kill a company's cash flow and render them noncompetitive and vulnerable to sudden, unforeseen costs.
One solution are consolidation programs of which there are two basic types: Reverse Consolidation and buyouts.
Reverse consolidation wraps up all existing balances and combines them (along with additional cash in most cases) into one, lowered payment. For example, a merchant had combined daily payments totaling over $2800 per day to 4 different lenders and needed to reduce his debt service payments but also required another $30,000 in working capital.
Using a reverse consolidation, I was able to give this merchant an amount which covered all his existing balances, added another $30k and reduced his payment to $1600 (almost 30% reduction!) daily including the new capital. Think of it as exchanging a 15 year mortgage with a 30 yr mortgage: You will pay more at the end in absolute terms but the payment drops in half!
Buyout consolidations are exactly what their name suggests: a buyout (payoff) of all or some existing balances replaced with a new loan but longer term.
This type of program requires a higher credit score but it can literally save companies who have over-extended themselves with too much leverage. For example a merchant came to me with two balances that had already been paid down but they still had significant time left before payoff and the merchant was in need of new capital.
The solution I offered was an amount that both paid off the existing lenders immediately and had enough capital left after the payoff to satisfy their needs. The benefit was the capital they needed was secured and their payment moving forward was much lower because, as the 1st position lender now, I had the ability to extend the term where it needed to be so the payment was much more affordable.
Any merchant holding multiple balances that needs additional capital please call me for a consolidation quote, it is an effective solution to an over-leveraged debt profile.