Iron Capital Equities launches platform for small businesses locked into expensive alternative debt


NEW YORK, February 15, 2022 /PRNewswire/ — Fintech group Iron Capital Equities, which operates multiple small business websites, announces its latest platform, Using banking intermediary technology, the fintech platform analyzes a company’s cash flow and determines how expensive Merchant Cash Advance (MCA) debt can be refinanced.

Businesses need to consolidate high interest rates and high MCA payments, especially now that thousands of businesses have received MCAs after emerging from post-pandemic government-imposed lockdowns.

Subprime small businesses have a hard time accessing traditional financing. Because their ability to obtain cash is limited, many agree to short-term advances, most with capital costs over 30% and payback periods of less than 12 months. Businesses use this expensive money for working capital, upcoming projects, inventory, payroll, etc. Consider a payday loan, but for a small business whose future receivables are being jeopardized as repayment security for a private lender.

“We see that companies that pay more than 3 MCAs at once often have a monthly debt service ratio of over 30% compared to their gross sales. This far exceeds the breakeven point for many companies,” he says Matthew Elling, founding partner of Iron Capital Equities. Businesses can use this platform with more than one Merchant Cash Advance (MCA).

Once the money runs out, companies often get another MCA to pay for the daily or weekly automatic payments for the 1st MCA. This method can get out of control as each position does not use the company’s cash flow to operate the business but instead uses it to pay for the MCA’s positions.

The reverse consolidation saves the company up to 50% in weekly cash flow allocation by providing the company with money to pay off its current MCA payment obligations. It is not a debt restructuring and the initial financing companies will not default. The term is essentially being extended, allowing the company to pay off its MCA debt and eventually climb out of debt.

Although Iron Capital Equities has offered this reverse consolidation program for years, this is the first time underwriting decisions have been able to determine the right savings using bank account adjustment software.

“We know that backward consolidation is designed to alleviate a company’s cash flow problems due to MCAs, now using bank account connectivity products and our fintech software can make better underwriting decisions,” explains Matthew Elling.

Media contact:
Matthew Elling
[email protected]

SOURCE Iron Capital Equities


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