The starting point
Judge a proposed arrangement by the whole written obligation and the business’s ability to perform—not just a lower daily debit or the word restructuring.
A proposal is not permission to change payments
An inquiry, referral, or pending negotiation does not itself modify your obligation. Do not alter contractual payments based on this information. Default consequences and collection activity may continue; legal notices and lawsuits require timely attention from appropriately qualified counsel.
Define the change being considered
A negotiated modification may concern withdrawal amounts, frequency, timing, or other terms if the parties agree. A proposal is a request, not a new contract. Lower periodic payments may leave the remaining obligation unchanged or spread collections over a longer period.
Identify the precise existing term and proposed replacement. Ask whether the proposal is temporary or ongoing, which accounts it covers, and whether other conditions are changing. Do not infer forgiveness, a release, or suspension of collections from an informal discussion about payment pressure.
Keep reconciliation and settlement distinct
Reconciliation is a process some agreements provide for adjusting remittances to actual receivables. Whether it exists, which records are required, and how to request it depend on the contract. It is not a universal hardship program, and an adjustment does not necessarily reduce the total purchased receivables amount.
Settlement involves seeking an agreed resolution of an obligation, potentially for a different amount and on specified conditions. It requires acceptance and resources to perform. Payment modification, reconciliation, and settlement should not be treated as interchangeable promises in an engagement or sales conversation.
Test the full payment schedule against cash flow
Use expected cash collections rather than booked sales, then deduct essential operating costs, other obligations, and a realistic allowance for variability. Map the proposed payments to the actual withdrawal days. A manageable monthly average can still fail when several debits clear before customer receipts arrive.
Test a slower period without assuming an unconfirmed sales rebound. For multiple MCAs, evaluate all obligations together. A concession from one provider may not create a sustainable overall arrangement if the remaining providers continue withdrawing at their existing levels.
Review total obligation, fees, and conditions
Compare the estimated remaining obligation before and after the proposal. Include independent servicing fees, any provider charges, payment dates, and required up-front resources. Ask how balances will be confirmed and whether the proposal affects existing default charges or claimed amounts.
Request written terms addressing duration, any later increase in payments, reporting duties, and what happens if performance fails. Where guarantees, liens, releases, or disputed contract terms are involved, seek appropriately qualified legal advice. A smaller withdrawal is not proof that those issues have been resolved.
Understand the review and independent engagement
New Guidance Group’s complimentary initial 30-minute consultation reviews debt, cash flow, and the owner’s needs. We serve owners nationwide, but independent provider availability and requirements vary. We do not negotiate, restructure obligations, lend, or provide legal, tax, or accounting advice.
Before engaging a servicing company, clarify its proposed path, creditor coverage, communication process, complete fees, and response if a proposal is rejected. Ask how accepted terms will be documented and who confirms implementation. A referral alone does not bind the creditor or change payment instructions.
What to prepare for a review
- Original agreements and every amendment or prior payment arrangement
- Current balance statements, payment history, and provider communications
- Bank and processor records supporting actual receivables and any decline
- A complete debt schedule and conservative weekly operating forecast
- Any proposed servicing agreement, fee schedule, or creditor term sheet