Reverse consolidation for merchant cash advances, week by week (2026)

A reverse consolidation is new financing for a business that is already repaying one or more merchant cash advances. It pays nothing off. Each week, for as many weeks as those advances still have to run, a new funder puts into the business bank account what the existing advances take out of it. In return the business owes the new funder more than it deposited, collected as one payment that runs for more weeks than the advances it covers.

It raises the total you pay, every time. The existing advances are still paid in full, and the new advance adds its own cost on top, because every dollar deposited is multiplied by the new factor rate. What a reverse consolidation changes is how much cash leaves the account each week, and for how many weeks.

In the example used throughout this page, a business paying $5,000 a week on advances with 16 weeks left would see a net $3,200 a week leave its account for 35 weeks. The total paid from today goes from $80,000 to $112,000. Those are round numbers chosen for illustration. They are not an offer.

Existing advances

Stay open. Each one is paid on its own schedule until its contract ends.

Deposits

Come from the new funder, in the amount of your existing payments, for the weeks those advances have left.

New payment

One payment to the new funder, running for more weeks than the advances it covers.

Total paid

Goes up, by the total deposited multiplied by the new factor rate, less the total deposited.

Time in a payment

More weeks than now. The deposits end with the existing advances, and the new payment does not.

What it is not

A payoff of any advance, a reduction of any balance, or debt settlement.

In each week the existing advances are still running, three things happen. The new funder deposits the amount of your existing payments. Your existing funders debit those payments as before. The new funder debits its own payment. The deposit and the existing payments cancel out, so the cash that actually leaves the business that week is the new payment. When the existing advances finish, the deposits stop and the new payment keeps going until the new advance is paid.

The example, in round numbers. A business carries merchant cash advances that take a combined $5,000 a week and have 16 weeks left, so $80,000 is still owed on them. It takes a reverse consolidation at a 1.40 factor rate, repaid in 35 weekly payments that start in week 1.

1. Weeks 1 to 16. The new funder deposits $5,000 each week. The existing funders debit $5,000 each week. The new funder debits $3,200 each week. Net, $3,200 leaves the account.
2. Week 16. The existing advances take their last payments and the deposits end. $80,000 has been deposited in all. At a 1.40 factor rate that makes $112,000 owed to the new funder in all, $51,200 of it paid by then.
3. Weeks 17 to 35. Nothing is deposited. The $3,200 payment continues for 19 more weeks.
4. Week 25. Payments to the new funder reach $80,000, the full amount it deposited. The 10 payments after that, $32,000 in all, are the cost of the reverse consolidation.

Set that against changing nothing. As it stands, the business would pay $5,000 a week for 16 weeks, $80,000 in all, and be finished. With the reverse consolidation it pays a net $3,200 a week for 35 weeks, $112,000 in all. That is $32,000 more and 19 more weeks in a payment.

When advances end in different weeks, the deposit for each one stops when that advance does, and the arithmetic is the same one advance at a time. If an advance debits every business day, five of those debits make its week.

This example is an illustration with round numbers. It is not an offer, a quote or a typical deal. The 1.40 factor rate and the 35-week term are placeholders, and your own figures will differ.

Enter four numbers: what your current advances take per week in total, how many weeks they have left, the factor rate on the new advance, and the number of weeks of the new payment. The calculator returns the total deposited to you, the total owed on the new advance, the new weekly payment, the net cash leaving your account each week, the total paid from today against staying as you are, the added cost, and the weeks you would be in a payment. It opens on the example above.

The calculator runs in your browser and sends nothing anywhere. It assumes every existing advance runs the same number of weeks at a fixed payment, the deposits equal those payments, the new payment is fixed and starts in week 1, and there are no fees. A fee taken from a deposit or added to the total makes the cost higher than shown.

A reverse consolidation costs the total deposited multiplied by the new factor rate, less the total deposited. In the example that is $80,000 x 1.40 = $112,000, less $80,000: an added cost of $32,000. Two numbers set the cost, the deposits and the factor rate. At a given factor rate, the length of the new term does not change it.

Why the total always goes up

Nothing you already owe gets smaller. Each existing advance is paid in full, on its own schedule, with the deposited money. The new advance is then owed on top of that at a factor rate above 1.00, so the total paid from today is higher than it would be with no change. A reverse consolidation cannot bring the total down. It can only move when the cash leaves.

There is a second layer. The $80,000 still owed in the example already contains the existing funders' cost, because it is what remains of earlier advances after their own factor rates were applied. The new factor rate is charged on the deposits that pay it, so the new cost is charged partly on old cost.

What the factor rate does to the cost

A February 2020 staff paper from the Federal Trade Commission says a business with a merchant cash advance repays the advanced amount plus a factor that is "often between 20% to 50% of that amount". As a factor rate, that is 1.20 to 1.50. The table applies that span to the example's $80,000 of deposits. The paper describes advances in general and is not a price list for reverse consolidations. A web search of the Federal Trade Commission, Federal Reserve, Consumer Financial Protection Bureau and Small Business Administration websites on November 12, 2026 found no page that uses the term for merchant cash advances, let alone a price for one.

What the term does, and does not do

At the same factor rate, a longer term spreads the same total over more weeks: it adds weeks, not dollars. A funder may quote a different factor rate for a different term, so compare the total owed in each written offer. Here is the example's $112,000 over three terms.

Both tables are arithmetic on the example. Against them, the business as it stands pays $5,000 a week for 16 weeks and $80,000 in all.

Why the same factor rate weighs more here than on a lump sum

With an ordinary advance the whole amount arrives on day one. Here the $80,000 arrives $5,000 at a time while $3,200 a week is already going back. In the example the deposits never run more than $28,800 ahead of the payments already made to the new funder. That high point comes in week 16, and the cost is $32,000.

Measured the way a loan's annual rate is measured, the example works out to about 198% a year. That figure counts each deposit at the start of its week and each payment at the end. With each deposit counted on the day of that week's payment, which is how the week-by-week table nets them, the same method works out to about 229% a year. The same $80,000 received as one lump sum, at the same factor rate and the same 35 weekly payments, works out to about 104% a year. All of these are comparison figures for this one example, not rates in any contract, and the method is described at the end of this page. The lump-sum figure is for new money a business receives and keeps. It does not describe a payoff consolidation, where the lump sum goes straight to balances that were due over the coming weeks.

What has to be in writing

For a business in Florida, section 559.9613 of the Florida Statutes requires a covered provider to give a written disclosure at or before consummation of a commercial financing transaction of $500,000 or less. Among its six items are the total amount of funds provided, the total amount to be paid to the provider, and the total dollar cost, which the statute defines as the second minus the first. Line that dollar cost up against the added cost in the calculator.

As of November 2026, at least 12 states have enacted commercial financing disclosure laws that reach merchant cash advances, and 3 of them require an annual rate to be disclosed. The statistics page on Clearwater's site lists each one with its statute. Whatever the state, ask whether any fee is taken from a deposit or added to the total, and get the total owed as one number in writing. This page reports what a statute says and is not legal advice.

A reverse consolidation fits a narrow case: the business earns enough to carry what it owes, and the trouble is that too much of it comes due in the same weeks. It does not fit a business whose revenue can no longer carry the total, because it makes the total larger.

It can fit when

• Revenue covers the business's costs and the squeeze is one of timing: several debits each week against receipts that arrive unevenly.
• The existing advances have enough weeks left for the change to matter. Put your own weeks into the calculator and weigh the added cost against the weeks it covers.
• You can name what will be different by the time the deposits stop: a season, a receivable, a contract, a cost you are removing. In the example the business still owes $3,200 a week for 19 weeks after the last deposit.
• A payoff consolidation would not cost less, because your contracts give no discount for an early payoff.

It does not fit when

• Receipts no longer cover the payments already scheduled. A reverse consolidation adds cost and weeks to that shortfall and does not close it. Start with your current funders, as described under the other ways out below.
• Only a few weeks of payments remain. With 4 weeks left in place of 16, the example's deposits would come to $20,000, and the same factor rate would add $8,000 to cover 4 weeks that were about to end anyway.
• The new payment would be about what you pay now. If the weeks of the new payment are fewer than your weeks left multiplied by the factor rate, the new payment is larger than the payments it covers. In the example that line is 16 x 1.40 = 22.4 weeks.
• You expect to add another advance as soon as the weekly outflow changes. Then two new obligations run together, on a total that is already higher.
• An existing contract bars additional financing while it is open. A reverse consolidation is additional financing, and that contract's default section says what the funder may then do.
• You have not read what your existing contracts say about new financing. The next section lists the clauses to find.

How many businesses carry more than one advance?

Carrying more than one advance at once is called stacking. The Federal Trade Commission staff paper describes it as taking out multiple merchant cash advances at the same time, "potentially encumbering the same receipts". Two sets of figures bear on how common it is: what businesses told Clearwater on their own applications, and how many firms the Federal Reserve found applying for or regularly using advances.

49%

of the businesses that applied to Clearwater and answered the question already had at least one open cash advance or business loan. Clearwater 2026 Applicant Data.

39%

of the applicants who already had an open advance or loan said they were carrying two or more. Clearwater 2026 Applicant Data.

$29,000

was the median amount applicants still owed on their open advances and loans on the day they applied. Clearwater 2026 Applicant Data.

$474

per business day was the median payment among applicants already repaying an advance or loan. Clearwater 2026 Applicant Data.

The applicant figures are self-reported answers on 698 applications and quote requests sent to Clearwater, and they count cash advances and business loans together. They describe businesses that applied to one broker, not all businesses. The Federal Reserve figures are as recorded on Clearwater's statistics page, updated November 10, 2026.

Your existing contracts stay in force during a reverse consolidation, so what they say about new financing matters before you sign anything. This page cannot tell you what your contracts say. It can tell you which clauses to find and read in full.

Why would a contract address new financing at all? An advance is a purchase of future receipts, and the Federal Trade Commission staff paper cited above notes that stacked advances can encumber the same receipts.

In each contract you already have, find

• Additional financing. Any clause about taking further advances, loans or other financing, or selling receivables again, while the advance is open. Note whether it bars new financing, requires the funder's consent, or says nothing. If it bars new financing, a reverse consolidation does not fit, as the section above says.
• Events of default. The list of what counts as a default, and whether new financing is on it. Then read what the contract lets the funder do after a default.
• Security interest. What the business pledged, and any promise not to give another party an interest in the same receipts or assets.
• Reconciliation. Whether you can ask for payments to be adjusted to actual receipts, what you must send, and how long the funder has to respond. If revenue has dropped, this is the clause to read first.
• Early payoff. Whether paying the balance early earns a discount. That is one of the things that decides whether a payoff consolidation would cost less than a reverse one. On a covered Florida transaction, the written disclosure must say whether prepayment carries costs or discounts and point to the contract provision that governs it (s. 559.9613(2)(f)).
• Who signed, and for what. Whether an owner is personally responsible for the balance, and whether anyone signed a confession of judgment, which the staff paper describes as the owner waiving the right to contest a collection lawsuit.

In the new contract, find

• The deposit schedule. The amount and date of every deposit, and every condition that lets the funder delay, change or stop one. A deposit that does not arrive changes nothing in your existing contracts.
• What is owed if the deposits stop early. Whether the factor rate applies to the full scheduled amount from signing, or only to the dollars deposited so far.
• The payment. Whether it is a fixed amount or a share of receipts, whether it is daily or weekly, when the first one is taken, and how many there are.
• Fees. Every fee, whether it comes out of a deposit or is added to the total, and when.
• Reconciliation and default. The same two clauses as above, this time in the new contract.
• Security and signatures. What the new funder takes as security, who signs personally, and whether a confession of judgment is part of the paperwork.
• Your existing funders. Whether you are asked to tell them, or to state that your existing contracts permit the new financing.

If a clause is unclear, ask a lawyer who reads commercial contracts before you sign. Nothing here is legal advice. Clearwater's guide on how to read an MCA contract goes through one clause by clause.

Clearwater Capital Group arranges reverse consolidations as a broker. It is not the funder, and it is paid from the funded deal. This page repeats four terms Clearwater publishes for the reverse consolidations it arranges.

Those four terms include no factor rate range and no minimum revenue, time in business or credit score for a reverse consolidation. The 1.40 in this page's example is a placeholder, and the only price that counts is the one in a written offer. Underwriting decides every file, and not every business qualifies.

What to have ready for each advance you carry: the remaining balance, the payment and how often it is taken, and the weeks left. They give you the first two numbers the calculator asks for.

A reverse consolidation is one of several routes for a business carrying more than one advance, and it is not the cheapest. The others are letting the advances finish, asking your current funders to adjust the payments, a payoff consolidation, and, where a lender will make one, a loan that refinances the balances. Debt settlement is a different kind of service.

Let the advances finish

Changing nothing adds no cost. In the example the business is finished in 16 weeks and pays $80,000. Every other route here costs more than that or depends on someone else agreeing.

Ask your current funders

The Federal Trade Commission staff paper says merchant cash advances are designed to take a fixed percentage of daily revenue, and that it would be concerning, and potentially unlawful, for a provider to fail to adjust payment amounts to reflect a decrease in sales. If your contract has a reconciliation clause, a request under it adds no new factor rate. A funder may also agree to a different schedule outside that clause. Get any change in writing. Clearwater's guide on how to get out of a merchant cash advance walks through the request.

Payoff consolidation

One new advance pays your existing balances at closing, so the old contracts end and one payment remains. At the same factor rate and term, and with no payoff discount, it produces the same weekly outflow and the same total as a reverse consolidation. In the example, $80,000 of payoffs at 1.40 is also $112,000, or $3,200 a week for 35 weeks. The differences are elsewhere. A payoff needs a payoff letter from every funder, it closes the old contracts, and any early-payoff discount reduces the amount to be financed. A reverse consolidation needs no payoff letters and leaves every old contract open.

New York law names one cost of a payoff that comes from the same provider. Section 808 of the New York Financial Services Law says that when a provider requires a business to pay off an existing financing from that provider as a condition of new financing, the provider must disclose the amount of the new financing used to pay prepayment charges and unpaid interest expense on the old one that were not forgiven at renewal. The disclosure question the statute prescribes asks whether the renewal includes any amount used to pay unpaid finance charge or fees, "also known as double dipping". New York's disclosure law covers financings of $2.5 million or less.

A loan that refinances the balances

A term loan from a bank or another lender can pay advances off at a cost that accrues over time in place of a fixed factor. A loan under the Small Business Administration's 7(a) program is not open for that while an advance is still active. The SBA's page on 7(a) loans lists "Refinancing current business debt" among their uses, says an applicant must be creditworthy and demonstrate a reasonable ability to repay, and says the SBA does not provide the loans directly: a lender does. The rules the SBA sets for those lenders are narrower. Appendix 14 of SOP 50 10 8.1, effective October 1, 2026, says sales-based repayment agreements, with merchant cash advances given as the example, are only eligible for refinancing if the original agreement has been converted to a term loan, has amortized for at least 24 months, and no additional agreements have been implemented since the conversion. It adds: "If the Sales-Based Repayment Agreement is still active, it is not eligible for refinancing."

Whether a bank or another lender will refinance open advance balances with a loan of its own, outside that program, is that lender's decision.

Debt settlement is a different service

Debt settlement is not financing. A business, or a company or attorney acting for it, asks a funder to accept less than the contract balance. This page does not cover it, and this site takes no applications for it. A reverse consolidation is the opposite arrangement: every existing funder is paid in full and on schedule.

• Who wrote it. Clearwater Capital Group, a business funding broker and the trade name of Clearwater Capital Solutions LLC. Clearwater arranges reverse consolidations and is paid when one funds, so it has a commercial interest in this subject.
• The example. One set of inputs: $5,000 a week on existing advances, 16 weeks left, a 1.40 factor rate, 35 weekly payments. Every example figure on the page is computed in code from those four numbers and the variations stated beside each table, and the code is tested. The inputs are round placeholders. No real file is behind them, and they are not an offer or a typical deal.
• The calculator. Total deposited is the weekly payment times the weeks left. Total owed is the total deposited times the factor rate. The new payment is the total owed divided by its number of weeks. Each week the deposit and the existing payments cancel, so the net outflow is the new payment. It assumes equal weeks left on every advance, fixed payments, a new payment that starts in week 1, and no fees.
• The annual figures. The rate per week at which the deposits and the payments are worth the same when both are discounted back to the start, multiplied by 52. The 198% figure counts each deposit at the start of its week and each payment at the end of its week. The week-by-week table nets each deposit against the payment made in the same week, as if both happened on the same day. On that timing the business holds each deposit for a shorter time, and the same method works out to about 229% a year, a higher figure. For the lump-sum comparison the whole amount is received at the start, which is the method Clearwater's calculators use. All of them are comparison figures for the example only, and none is a rate in a contract.
• Clearwater's terms. The four terms shown are copied from the terms Clearwater publishes on its own site. This page states nothing else about the reverse consolidations it arranges.
• The search. On November 12, 2026 one web search for "reverse consolidation" merchant cash advance was limited to these sites: ftc.gov, federalreserve.gov, fedsmallbusiness.org, consumerfinance.gov, sba.gov, gao.gov, treasury.gov, uscourts.gov, sec.gov, ag.ny.gov, dfpi.ca.gov, dfs.ny.gov. It returned no page that uses the term for merchant cash advances. The only results were securities filings that use the phrase in an unrelated corporate sense. One search does not prove that no such page exists.
• The applicant figures. Clearwater 2026 Applicant Data: self-reported answers on applications and quote requests from April 24, 2026 to October 31, 2026. Each line in the table shows how many applicants answered.
• What this page cannot tell you. What your contracts say, what any funder will offer, what a reverse consolidation is priced at in general, or whether one is right for your business. It is not legal, tax or financial advice.
• Corrections. Write to efras@clearwatercapitalgrp.com.

Sources read on November 12, 2026

The Florida size limit of $500,000 is in section 559.9612(7), read the same day. The Federal Reserve survey figures were not re-read for this page. They are taken from Clearwater's statistics page, which links the report.