The short answer
Establish how many positions, what they cost daily, and whether the business is profitable underneath them — then say plainly what that means. A merchant with three or four positions consuming most of their receipts is usually not a funding problem, and adding a fifth is a broker choosing a commission over a business. Sometimes the right advice is consolidation, or nothing.
This is the call where the industry’s reputation is made and lost. The merchant wants money, somebody will place it, and whether that somebody is you comes down to what you find out before you decide.
Establish three things
- How many positions, and what each takes daily. The total remittance as a share of daily receipts is the number that matters.
- Whether the business is profitable before those remittances. A profitable business with a timing problem is a different case from an unprofitable one.
- What the money is actually for. Covering existing remittances is the answer that should stop the conversation.
What actually helps
| Situation | What might help |
|---|---|
| Profitable, timing problem, dated relief coming | Reverse consolidation, with a commitment to stop stacking |
| Positions nearly repaid | Waiting, then a clean renewal |
| One position, strong file | A normal second position |
| Unprofitable underneath the remittances | Nothing you sell. Say so. |
Why the honest version pays
A merchant told plainly that another advance would hurt them remembers it, and a meaningful share of them come back when they are fundable — because they now believe you. That is a slower business than placing everything and a considerably more durable one, and it is the only version that survives the industry getting more regulated rather than less.
It also protects your funder relationships. Files that default trace back to whoever submitted them, and a broker known for placing distressed paper gets read differently on every subsequent deal.