Fintech Group, Iron Capital Equities announced the launch of their newest platform. The fintech platform analyzes a business's cash flow and recommends ways to restructure costly Merchant Cash Advance (MCA) debt using banking intermediary technology.
Businesses must combine high-interest, high-payment MCAs, all the more so now that thousands of businesses have gotten MCAs following post-pandemic government-imposed lockdowns.
Matthew Elling, founding partner at Iron Capital Equities, said "We see that businesses that are paying more than 3 MCAs at one time often have a monthly debt servicing ratio of over 30% compared with their gross sales. This far exceeds the profitability threshold for many businesses.” Businesses may utilize this platform for multiple merchant cash advances (MCA).
The Reverse Consolidation reduces the business's weekly cash flow allocation by up to 50% by giving funds to pay for the company's existing MCA payment commitments. This is not a debt restructuring, and the initial financing firms have not been notified of the default. The time is effectively prolonged to let the firm repay its MCA loans and finally emerge from debt.
While Iron Capital Equities has offered this Reverse Consolidation service for years, this is the first time that underwriting choices using bank account rectification software can accurately identify the appropriate savings.
"We know that the reverse consolidation works to alleviate a business' cash flow problems because of MCAs, now the use of bank account connectivity products and our fintech software can make better underwriting decisions."
Matthew Elling