Refinance an MCA to a Term Loan — The 30-Day Playbook

Merchant cash advances are easy to get into and hard to get out of. The daily ACH debit (typically 10–20% of revenue) compresses operating cash flow, and the effective APR of 40–120% means the debt service per dollar borrowed is far higher than any traditional product. This page walks the 30-day playbook to refinance MCA to amortizing term debt: what qualifies you, which lenders to apply to, document checklist, and the math that determines whether the refinance saves real money. For broader MCA exit context see how to get out of an MCA and why stuck in MCA cycle.

Why MCA Refinance Almost Always Saves Money

The economic case for refinancing MCA to term debt:

• MCA effective APR: Typical factor rate 1.20–1.50x with 6–18 month payback. On a $100K MCA at 1.30 factor over 9 months, effective APR is approximately 70%.
• Term loan APR: Bank conventional 9–14%; SBA 7(a) ~10–12% (capped); specialty MCA consolidation 12–25%.
• Daily ACH compression vs monthly payment: $100K MCA with 25% holdback on $500K/yr revenue = ~$10,400/mo in daily debits, suffocating cash flow. Same $100K refinanced to 5-year term loan at 12% APR = $2,224/month, freeing $8,176/mo for operations.
• Cash flow restoration is often the bigger benefit than rate savings. Even if the dollars-paid total is similar (rate × years), the monthly cash flow improvement enables business operations that the daily debit prevented.

Refinance math caveat: if you only have 60–90 days left on your MCA, the interest savings are smaller and may not justify the new origination fee + closing time. Run the math before committing.

Who Will Refinance an MCA

Three lender categories realistically refinance MCAs in 2026:

1. SBA 7(a) refinance (best long-term economics)

• What: SBA 7(a) loan structured to pay off existing MCA(s) plus provide additional working capital.
• Rate: Prime + 2.25–4.75% capped, so ~9.75–12.25% APR variable in May 2026.
• Term: 10-year amortization for working capital / MCA refi.
• Timeline: 60–90 days at PLP lender. This is the slowest option — not a 30-day fit by itself. Useful as longer-term plan after faster bridge.
• Qualifying: 2+ years in business, $300K+ annual revenue, 680+ FICO, 1.25x+ DSCR after new loan, eligible industry, no SBA prior defaults.
• Cost: SBA guaranty fee (3–3.75% on guaranteed portion), lender packaging $3K–$5K. Rolled into loan.
• Best for: Borrowers who can wait 60–90 days and want the lowest long-term cost. Can pair with faster bridge for immediate MCA exit + SBA refi when SBA closes.

2. Bank conventional term loan (best if you qualify)

• Rate: 9–15% APR depending on credit and bank.
• Term: 3–7 years typical for MCA-refi-purpose term loans.
• Timeline: 2–6 weeks at existing deposit relationship bank; longer at new bank.
• Qualifying: 720+ FICO ideal, 3+ years in business, $500K+ revenue, clean financials. The active MCA is a yellow flag at most banks — lenders want to see the MCA was for one-time use, not recurring cash flow stress.
• Reality check: Most borrowers who took an MCA can't qualify for bank conventional — if they could, they wouldn't have taken the MCA. Apply but don't count on approval.

3. Specialty MCA consolidation lenders (most accessible)

• Names: Credibly, Headway Capital, Funding Circle (smaller deals), BlueVine consolidation product, OnDeck consolidation, Newtek non-bank term loans, Specialty MCA-refi shops (some operate B2B only).
• Rate: 12–25% APR depending on profile.
• Term: 6–36 months typical; some go to 60.
• Timeline: 5–15 days from application to funding.
• Qualifying: 660+ FICO acceptable; 600–659 sometimes works at Credibly. 1+ year operating, $150K+ revenue. Existing MCA is acceptable (it's literally the use case).
• Best for: Borrowers who don't qualify for SBA or bank but need to escape MCA cycle. Pricing higher than SBA but materially better than MCA itself.

The 30-Day Playbook

Days 1–5: Diagnostic + payoff quote

• Contact MCA funder, request written payoff quote good for 30 days. Most MCAs include a discount for early payoff (typically saves 10–25% of remaining factor) — this is the lever that makes refi math work.
• Pull last 12 months of business bank statements showing MCA debits and all other operating activity.
• Pull most recent business + personal tax returns.
• Compute current effective APR on existing MCA and monthly cash flow drag of daily/weekly debits.
• Compute target post-refi monthly payment and verify business can support it from cash flow.
• Pull personal credit report — identify and address any easy fixes (paid collections, dispute errors).

Days 5–10: Parallel applications

• Specialty MCA consolidation lenders: apply to 2–3 (Credibly, Headway, Funding Circle, BlueVine). These are the realistic 30-day options.
• Bank conventional: apply at your existing deposit relationship bank if you have one. Worth trying even if odds are low.
• SBA 7(a): apply at a PLP lender as the longer-term plan, knowing it won't close in 30 days but starting the clock.
• Submit complete application packages: bank statements, tax returns, debt schedule (including the MCA), PFS, business formation docs, MCA payoff quote.

Days 10–20: Underwriting + approvals

• Specialty lenders return decisions in 24–72 hours typically; bank in 7–14 days; SBA in 14–21 days for initial credit decision.
• Negotiate terms when multiple offers received. Specialty lenders often improve pricing 100–200 bps with competing offers.
• Accept best offer, sign term sheet, provide remaining documents.

Days 20–30: Close + payoff

• Loan documents drafted by refi lender's attorney.
• Refi lender wires payoff amount directly to MCA funder per the payoff quote.
• MCA funder confirms payoff received, releases UCC lien on business assets within 14–30 days post-payoff.
• Daily ACH from MCA stops next business day after payoff received.
• New monthly term loan payment begins per the loan's terms (typically 30 days after funding).

Refi Math: When It Saves Real Money

Example: $100K MCA, original 1.30 factor (total payback $130K), 9-month term, $14,444/month in daily debits (~$667/day, 22 business days/mo).

Status quo (continue MCA)

• Months 1–9 total payback: $130,000
• Cash flow impact: -$14,444/month for 9 months
• Effective APR: ~70%

Refi at month 3 (6 months remaining)

• Remaining MCA balance with early payoff discount: ~$70,000 (vs scheduled $86,664)
• Specialty lender refi: $70,000 over 36 months at 18% APR + 3% origination = $2,531/month
• Total payback on refi: $91,116 + $2,100 origination = $93,216
• Total spent if you continued MCA: $43,332 (paid months 1–3) + $86,664 (remaining 6 months) = $129,996
• Total spent with refi: $43,332 (already paid) + $93,216 (refi over 36 months) = $136,548
• Total cost slightly higher with refi (+$6,552) but cash flow dramatically better ($2,531/mo vs $14,444/mo — $11,913/mo freed up)
• Refi math depends heavily on (a) early payoff discount on MCA, (b) refi rate, (c) refi term length. Always run actual numbers.

The cash flow improvement is usually the bigger win than total dollar savings. Operating businesses need cash flow to function; total interest is secondary to monthly burn.

Document Checklist for MCA Refi

• Written MCA payoff quote (good for 30 days, identifying early payoff discount)
• 12 months business bank statements (all operating accounts — lender will verify MCA debits and other activity)
• 2 years business federal tax returns
• 2 years personal federal tax returns for each 20%+ owner
• YTD profit & loss and balance sheet
• Business debt schedule including the MCA (original advance, current balance, daily/weekly debit, factor rate)
• AR and AP aging reports
• Personal financial statement (PFS) for each 20%+ owner
• Business formation documents (Articles of Incorporation/Organization, EIN letter, operating agreement)
• Driver's license / government ID for owners
• Voided business check or bank routing for ACH funding
• Explanation memo: why you took the MCA, what changed, why refi now will work

What to Watch Out For

• MCA renewal trap. MCA funders aggressively pitch “renewal” or “additional funding” before your current MCA pays off. Renewals usually compound the problem (longer-duration debt at same factor). Decline renewals while refinancing.
• Stacking new MCA on top of current MCA. Some MCA funders allow stacking; some prohibit. Either way, stacking is the worst possible move — it compounds cash flow stress. Stop the cycle, don't add to it.
• Defaulting on current MCA mid-refi. If you miss payments on current MCA, refi lenders see the default and back out. Stay current on the MCA throughout the refi process even when cash flow is tight.
• Refi lender that's actually another MCA. Some “refi” products are factor-rate based products (just longer terms). Read the disclosure carefully — a real refi term loan has APR, monthly payments, and amortization schedule.
• Personal guarantee scope expansion. Refi loans typically require new personal guarantee. Read scope carefully — don't agree to cross-collateralization with personal real estate unless required.
• Origination fees that wipe out savings. Some specialty lenders charge 4–8% origination, which can erase the rate savings. Compute all-in cost including fees.
• UCC lien transition delays. MCA funder's UCC lien takes 14–30 days to release after payoff. New refi lender may require lien clearance before funding. Coordinate carefully — sometimes refi lender is willing to fund into escrow pending UCC release.

If MCA Refi Doesn't Work

If specialty lenders decline and you can't qualify for bank or SBA, options narrow:

• Negotiate directly with MCA funder for restructure. Some MCA funders will renegotiate to lower daily debit + extend term if you're falling behind. Lender prefers slower payment to default.
• MCA debt settlement firm. Specialty firms (Vince Cefalu, Better Debt Solutions, ProSolutions) negotiate lump-sum settlements with MCA funders — typically 40–70% of remaining balance. Often used when funder won't restructure and bankruptcy is the alternative. See how to get out of an MCA.
• Bankruptcy. Chapter 11 reorganization or Chapter 13 (sole proprietor) restructures MCA debt. Last resort with significant credit and operational impact.
• Sell business assets or refi real estate. If you own business real estate or other assets, refi against those to generate cash to pay off MCA.

Get Matched for MCA Refinance

The fastest way to refinance an MCA is to apply through a marketplace that submits to specialty MCA consolidation lenders, bank, and SBA in parallel. Get matched for MCA refinance — one application, multiple offers within 24–72 hours. Also see how to get out of an MCA, why stuck in MCA cycle, MCA mistakes that keep you in cycle, and how to get out of bad business debt.