Yes — MCAs can be refinanced, and for most businesses with active MCA debt, refinancing is a meaningful financial improvement. Three paths exist: SBA 7(a) loan (cheapest, slowest), traditional bank term loan (cheaper than MCA, requires strong credit), and consolidation MCA (fastest, more expensive than the alternatives but available when others aren't).
Which path works depends on your credit score, time in business, and how fast you need the refinance to close.
Path 1: SBA 7(a) Refinance
Best math, slowest timeline.
SBA 7(a) loans can refinance MCA debt at 10-13% APR, replacing the effective 60-90% APR-equivalent of most MCAs. For a $200K MCA balance, the refinance saves roughly 5-10x on monthly payment and ~$30-50K total cost over the loan life.
- Requirements: 650+ FICO, 2+ years in business, profitable on last year's tax return, full financial documentation
- Timeline: 30-90 days from application to closing
- Cost: 10-13% APR, 7-10 year term, 2-4% closing costs
- How: Apply with an SBA Preferred Lender (PLP) — Live Oak Bank, Newtek, Celtic Bank, Huntington — for fastest approval. SBA proceeds wire directly to MCA funders for payoff.
Path 2: Bank Term Loan Refinance
Faster than SBA, requires good credit.
Online or bank term lenders (Funding Circle, OnDeck term product, local credit unions) can refinance MCA debt at 11-25% APR. Faster timeline than SBA (1-7 days for online, 7-30 for bank), but qualification bar is similar.
- Requirements: 650+ FICO for banks, 600+ for online; 1+ year in business
- Timeline: 1-7 days online, 7-30 days at banks
- Cost: 11-25% APR, 1-5 year term
- How: Apply directly. Use proceeds to pay off MCA. Some lenders require proof of payoff before disbursing remaining funds.
Path 3: Consolidation MCA
Fastest, most expensive of the three.
A consolidation MCA is a single new advance large enough to pay off all existing MCA balances. Replaces multiple daily ACHs with one. Cost is typically a 1.30-1.42 factor — higher than SBA or term loan, but achievable when those don't qualify.
- Requirements: 4+ months in business, $20K+ monthly deposits, willingness to disclose all active MCAs
- Timeline: 24-72 hours
- Cost: 1.30-1.42 factor, 6-12 month term
- How: Apply with an MCA funder. Funder reviews bank statements and active MCA balances. New advance funds, with proceeds wired to existing MCA funders for payoff.
Decision Tree
FICO 650+, 2+ years in business, profitable, can wait 30-90 days? SBA 7(a). Best math by far.
FICO 650+, 1+ year in business, can wait 1-30 days? Bank or online term loan. 5-7x cheaper than MCA.
FICO under 650 or business under 2 years, need refinance now? Consolidation MCA. Higher cost than alternatives but available in 24-72 hours.
Cash flow can't sustain payments at any structure? Settlement negotiation with each funder, not refinance. This is a different conversation about restructuring debt below face value.
Math Comparison: $150K MCA Stack
Business with $150K active MCA balance, daily payments totaling $1,200, ~7 months remaining at blended 1.32 factor.
Stay with current stack
- Daily ACH: $1,200
- Monthly burden: ~$26,400
- Total remaining cost of capital: ~$48K (over 7 months)
Refinance via SBA 7(a) @ 11% APR, 7 years
- Monthly payment: $2,560
- Total cost of capital over 7 years: $65K
- Cash flow improvement: $24K/month back to operations
Refinance via term loan @ 18% APR, 3 years
- Monthly payment: $5,420
- Total cost of capital over 3 years: $45K
- Cash flow improvement: $21K/month back to operations
Consolidation MCA @ 1.35 factor, 10 months
- New advance: $150K, total payback $202.5K
- Daily ACH: ~$960
- Monthly burden: ~$21,100
- Cash flow improvement: $5K/month back to operations
All three improve cash flow. SBA improves it by ~$24K/month — almost 5x what consolidation MCA provides. The trade-off is timeline (90 days vs 72 hours) and qualification (650+ FICO vs revenue-only).
Common Mistakes to Avoid
- Stacking instead of refinancing. Adding a new MCA on top of existing ones is not a refinance — it's stacking, and it makes the problem worse. Refinance pays off the old debt; stacking adds to it.
- Refinancing too late. Once a default has been triggered, refinance options narrow significantly. Best to refinance before missing payments.
- Not requesting payoff letters. Without a current payoff letter from each MCA funder, the refinance can't size correctly. Most funders provide payoffs within 1-2 business days of request.
- Using consolidation MCA when SBA was available. The 30-90 day SBA timeline feels long, but the 5-10x cost difference makes it worth waiting in almost every qualifying case.
Sources & References
- Bank denial and small business credit access figures cited in this piece are derived from the Federal Reserve Small Business Credit Survey. Approval rates for small business credit applications at large banks have ranged from approximately 13%-31% across recent survey years, depending on bank category and reporting period.
- Small business finance landscape and lending program data: SBA Office of Advocacy.
- Merchant cash advance industry standards and disclosure practices: Small Business Finance Association (SBFA).
- Commercial financing disclosure regulations referenced (NY FAIR Act, CA SB 1235/666/362, VA, UT) are summarized from the published statutes; consult counsel for specific compliance application.