Reverse Consolidation

What it means

Reverse consolidation is frequently confused with a buyout. In a buyout the original advance is settled and closed; in a reverse consolidation the original positions remain in place and the new facility funds the payments, lowering the effective outflow per period.

Why it matters when you apply

Underwriting for revenue-based business funding leans on bank activity, time in business, industry and existing positions. Where this term touches one of those, it can move a decision.

See the four factors that decide most files on the qualification page.

Related terms

MCA Buyout — When a new funder pays off an existing advance in full and replaces it with a single new facility.

Daily Payments — A repayment structure that withdraws from the business bank account every business day.

Weekly Payments — A repayment structure that withdraws once per week rather than every business day.

Where this fits

Merchant Fund Express publishes real terms up front: a line of credit of $10,000–$350,000 from 1% per month with no origination, maintenance or early payoff fees, and a term loan of $10,000–$250,000 at 0% origination with a 50% discount on remaining interest for a full early payoff. See the products →

Common questions

What is reverse consolidation?

New funding that supplies a business with capital to cover its existing advance payments, restructuring the payment schedule without formally paying off the original positions.

How does this affect my approval?

It depends on the factor it touches — industry, bank activity, time in business or existing positions. Those four decide most files.

Where can I see real rates and terms?

Every product page on this site publishes the amount range, term, rate and fee structure up front.