Multi-State Hospitality Staffing Company: Saving $2.15 Million Through MCA Debt Restructuring

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Case: Managing $5.1 Million in MCA Debt

A multi-state hospitality staffing company approached MCA Stacking Solutions (MCASS) while facing serious financial pressure from multiple merchant cash advances (MCAs). The company had approximately $5.1 million in outstanding MCA debt spread across six different funders. Under the existing agreements, the company was required to make combined weekly payments of $180,000.

These high payment obligations placed significant pressure on the company’s cash flow and made it difficult to manage daily operations and other financial commitments. The company needed immediate payment relief while working to secure refinancing. It also had an outstanding over-advance of $1.9 million with its factoring company, creating another financial challenge that needed to be addressed to protect its ongoing business operations.

Strategy: Restructure Payments and Secure Refinancing

MCASS was retained to negotiate more manageable weekly payments with all six MCA funders. The objective was to reduce the immediate financial burden and provide the company with enough time to apply for refinancing.

The negotiations were challenging, as some of the stacked MCA funders strongly objected to reducing their contractual payments. However, MCASS continued working with the funders to reach temporary payment arrangements that would support the company’s cash flow while its refinancing application was underway.

Along with securing payment relief, MCASS focused on negotiating discounted settlements that would allow the company to eliminate its MCA debt and repay the factoring company’s outstanding over-advance.

Resolution: Progressive Weekly Payment Reductions Over Four Months

Despite strong objections from some funders, MCASS successfully negotiated the following payment reductions over four months:

  • Month 1: Weekly MCA payments reduced from $180,000 to $90,000.
  • Month 2: Weekly payments further reduced to $80,000.
  • Months 3 and 4: Weekly payments reduced again to $72,000.

These progressive reductions provided the company with additional cash flow flexibility while it pursued refinancing.

Once the company received a $5 million refinancing commitment, MCASS successfully:

  • Negotiated Discounted Payoffs: Secured settlement agreements with all six MCA funders for a combined payoff of $2.85 million.
  • Saved $2.15 Million: Reduced the company’s $5.1 million MCA debt by $2.15 million through discounted settlements.
  • Addressed the Factoring Over-Advance: Helped the company use the financial relief from the restructuring to repay its factoring company’s $1.9 million over-advance.
  • Eliminated MCA Debt: Successfully resolved the outstanding MCA obligations at a substantial discount.

Conclusion: Eliminating MCA Debt and Preserving Business Operations

Through structured negotiations, progressive payment reductions, and discounted settlements, MCASS helped the hospitality staffing company overcome a challenging financial situation. The company eliminated its $5.1 million MCA debt by settling for $2.85 million, saving $2.15 million, and repaid its factoring company’s $1.9 million over-advance.

These results allowed the company to remain in business and maintain its factoring relationship going forward. This case demonstrates how MCASS combines MCA payment restructuring, multi-funder negotiations, and debt settlement strategies to help businesses manage complex financial obligations and protect their ongoing operations.