I Want to Refinance My MCAs — What Are My Options?

If two or three advances are taking a slice of every day's deposits, the problem is no longer the cost of the money. It is the speed of repayment. Refinancing an MCA is about moving that burden from daily to monthly, and from a few months to a few years — without signing something that makes next quarter worse. Here are the six real options, in the order most owners should consider them.

First, get the numbers on one page

Before you talk to anyone, write down for each advance: original amount funded, total payback, amount still owed, daily or weekly remittance, remittance frequency, and the funder's name. Add them up. The total daily debit is the number that matters — it tells you how much of every day's sales never reaches your operating account.

Then calculate what percentage of your monthly revenue is leaving as remittances. Above roughly 20%, most businesses cannot buy inventory and make payroll comfortably. Lenders will look at exactly the same ratio.

Option 1: A consolidation term loan

A single term loan that pays off the advances and leaves you with one monthly payment over one to five years. This is the cleanest outcome: lower total cost, far lower daily cash drain, and a clear end date.

What it takes: decent credit, consistent deposits, and generally a debt service coverage ratio of 1.15x or better after the new payment. The loan needs to be large enough to retire the balances in full.

Watch for: prepayment terms on the existing advances. Many are not discounted, so you repay the full remaining balance, not the funded amount.

Option 2: An SBA 7(a) refinance

SBA rules allow qualifying business debt to be refinanced, often up to 90% loan-to-value, and high-cost short-term debt is exactly the sort of thing the programme is designed to replace. Rates in late 2026 ran from 10.00% to 13.50% depending on size — a fraction of advance pricing — with terms up to 10 years for working capital.

What it takes: time (30–90 days), tax returns, financial statements, and a lender willing to look past the advances. Business acquisitions and owner buyouts now need a DSCR of 1.25x, with 1.15x for expansions.

Worth knowing: some lenders will not refinance advances taken within the last few months, and seller notes or related-party debt have their own rules.

Option 3: Reverse consolidation

A funder deposits money into your account on a schedule to cover your existing remittances, while you repay them on longer terms. It reduces the daily drain immediately without paying the advances off.

The trade-off: you now owe both the original advances and the reverse consolidation. Total cost usually rises. It can buy breathing room for a business with a clear seasonal recovery ahead; it is dangerous as a way to delay a structural problem.

Option 4: Renegotiate directly with the funder

Underused and often effective. Funders would rather restructure than chase a defaulted balance. Ask for a reduced daily remittance for a defined period, a switch from daily to weekly, or a discounted lump-sum payoff if you can raise part of the balance elsewhere.

Put the request in writing, attach recent bank statements showing the strain, and propose a specific number rather than asking what they can do.

Option 5: Replace the advance with asset-based funding

If your cash is tied up in receivables or equipment, invoice factoring, an equipment sale-leaseback or a line of credit secured by assets can generate the money to clear advances at a much lower cost. This works especially well for B2B businesses with net-30 to net-90 customers.

Option 6: A structured workout

If remittances are already bouncing, talk to a commercial attorney before you sign anything else. Workouts negotiate reduced balances or payment plans across multiple funders. It is a last resort and it has consequences — including UCC filings, possible default judgments and damaged funder relationships — but it is better than default by surprise.

What to avoid

• Another advance to pay the last one. Stacking compounds the problem within weeks.
• "Debt relief" firms charging large upfront fees with a promise to make the advances disappear. Legitimate help is paid for work done, and no one can guarantee a specific outcome with your funders.
• Anyone who tells you to stop remitting before an agreement is in place. That can trigger personal guarantees and UCC enforcement.
• Signing a new confession of judgment. Know what you are agreeing to.

A realistic sequence

1. Total your remittances and calculate the percentage of monthly revenue.
2. Request payoff letters from every funder — balances are often lower than you think.
3. Apply for a consolidation loan or SBA refinance first, because they are the cheapest exits.
4. If approvals fall short, negotiate directly with the largest funder.
5. Treat reverse consolidation as temporary relief with a plan attached, not a solution.
6. Once the dust settles, build a line of credit before the next cash crunch.

Frequently asked questions

Can I refinance an MCA with bad credit?

Sometimes. Asset-backed options — factoring, equipment refinancing — care more about the asset than your score. Unsecured consolidation generally needs 600+, and SBA lenders are typically comfortable from about 650–680.

Will refinancing hurt my credit?

Applications may cause inquiries, and a new loan adds to reported debt. Compare that with the alternative: missed remittances, NSF fees and a possible default, all of which do far more damage.

How quickly can a consolidation close?

Private consolidation loans commonly fund in 3–10 business days. An SBA refinance takes 30–90 days, so start it before the pressure becomes acute.

Do I have to pay the full payback amount to settle early?

Usually yes, unless the agreement contains a prepayment discount. Always request a written payoff letter — a few funders will negotiate a reduction for immediate payment.

What lenders want to see before they refinance you

• Payoff letters for every position, dated within a few days.
• Three to six months of statements showing the remittances and, ideally, no NSFs in the most recent 30–60 days.
• A reason the advances were taken. "We funded a large order and it turned" is a story lenders can underwrite. "We needed the money" is not.
• Evidence that the daily drain is the problem, not the revenue. Stable or growing deposits make a refinance far easier.
• A plan to avoid repeating it — usually a line of credit arranged alongside, so the next cash gap does not become the next advance.

The maths that decides it

Suppose three advances take a combined $780 a day — about $16,400 a month — against $70,000 of monthly deposits. That is 23% of revenue leaving before any bill is paid. A consolidation loan of $120,000 over 36 months at 18% costs roughly $4,340 a month. Same debt, same business, with about $12,000 a month returned to operations.

That is why consolidation is worth pursuing even at a double-digit rate. The rate is not what is hurting you; the speed of repayment is.