Fairhaven Business Partners
Fairhaven Business Partners

Situations

Help organised by what is happening, not by what we sell. Start with the situation closest to yours.

I was declined

A decline is a data point, not a verdict on your business. Most declines come down to one of five things, and each one has a fix or a workaround.

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I'm behind on payments

Missing remittances on an advance is serious and it is also negotiable. What you do in the next few business days matters more than what already happened.

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I have more than one advance

Two positions can be fine. Three or more, each taken to carry the last, is how a profitable business runs out of cash. The way out starts with one honest table.

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I want out

There are five ways out of a merchant cash advance: pay it down, pay it off early, refinance it, settle it or let it run. Each has a price, and some of the prices are not in dollars.

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I was declined

You were declined. Here is what that does and doesn't mean.

A decline is a data point, not a verdict on your business. Most declines come down to one of five things, and each one has a fix or a workaround.

First, in order

  1. Ask for the reason in writing — Funders and banks usually say which rule you missed: time in business, deposits, NSF days, an open position or credit. The fix depends on which.
  2. Pull your last three months of bank statements and count NSF and negative-balance days — That is what an underwriter counted. More than three or four in a month is the most common hidden reason.
  3. Do not reapply everywhere at once — A dozen applications in a week looks like distress to the next underwriter and can trigger hard credit pulls you did not need.
  4. Decide whether the money is still needed on the same timeline — If a bank or SBA lender can say yes in six weeks and the need can wait, that path is cheaper.

The full guide for this situation is being reviewed. Talk to someone meanwhile.

I'm behind on payments

You're behind on your daily or weekly payments. Here is what to do before the next draft.

Missing remittances on an advance is serious and it is also negotiable. What you do in the next few business days matters more than what already happened.

First, in order

  1. Read the default and reconciliation sections of your agreement today — You need to know whether a confession of judgment exists, which state's law applies, and whether revenue-based reconciliation is written in.
  2. Call the funder before the third missed draft, not after — Most funders would rather adjust the daily amount than start collections. The call is harder to have after a notice goes out.
  3. Work out the real number: all remittances per day as a share of average daily deposits — Above roughly 15–20% most businesses cannot sustain the load. That number decides whether a restructure is enough or a bigger change is needed.
  4. Do not take a new advance to cover the old one — Stacking turns a cash-flow problem into an insolvency problem within a few months.
  5. If a notice, UCC lien or lawsuit arrives, talk to an attorney that week — Deadlines in judgment and lien matters are short, and some defences disappear if you miss them.

The full guide for this situation is being reviewed. Talk to someone meanwhile.

I have more than one advance

You have more than one advance open. Here is how to see the whole picture and what reduces it.

Two positions can be fine. Three or more, each taken to carry the last, is how a profitable business runs out of cash. The way out starts with one honest table.

First, in order

  1. List every position: funder, date, amount received, total purchased amount, daily or weekly draft, balance left — Owners almost never have this in one place. Until it exists, nobody — you, a partner, an attorney — can tell you what the real options are.
  2. Add up the daily load and divide by average daily deposits — That share is the whole story. Under 10% is manageable, 10–20% is tight, above 20% needs a change now.
  3. Check each agreement for a no-stacking clause — Taking a new advance may already be a breach of an older one. That changes what you can safely do next.
  4. Rank positions by what they cost to carry and when they end — Some end in weeks. Letting them run off may do more than any refinance.

The full guide for this situation is being reviewed. Talk to someone meanwhile.

I want out

You want out of your advance. Here is every exit, with what each one actually costs.

There are five ways out of a merchant cash advance: pay it down, pay it off early, refinance it, settle it or let it run. Each has a price, and some of the prices are not in dollars.

First, in order

  1. Find the remaining purchased amount and any early-payoff discount in your agreement — A factor rate is fixed: paying early saves nothing unless a discount is written in. Many agreements have one; most owners never ask.
  2. Ask the funder for a payoff letter — It states the exact number and the date it is good through. Everything else is a guess.
  3. Compare the payoff cost against the cost of what would replace it — A refinance that costs more over its life than the remaining advance is not an exit; it is a longer stay.
  4. Decide whether the real goal is a lower daily amount or being done — They lead to different options. Say which one you want before anyone sells you either.

The full guide for this situation is being reviewed. Talk to someone meanwhile.

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