Refinancing an MCA Into Lower-Cost Funding
Refinancing a Merchant Cash Advance (MCA) involves securing a lower-cost loan, such as a term loan or line of credit, to pay off the remaining balance of high-cost factor rate debt. By moving from daily or weekly ACH debits to monthly installments, business owners can reduce their effective APR from 50%+ to as low as 8.99% while significantly improving daily cash flow.
Last updated June 8, 2026
Key takeaways
- Refinancing can lower your effective APR from 50%-100% down to 10%-25%.
- Most traditional lenders require at least 2 years in business to refinance an MCA.
- A 'payoff letter' is required from your current MCA funder to calculate the exact refinance amount.
- Transitioning from daily ACH debits to monthly payments drastically improves your business's daliy cash flow.
- Check for prepayment 'discounts'—some MCAs allow you to save on remaining fees if you pay early.
- Consolidation handles multiple advances, while refinancing typically replaces one expensive position.
Who this is for
This guide is for business owners currently feeling the 'squeeze' of daily or weekly merchant cash advance payments. If you have a solid revenue base but find that your growth is stalled because your cash flow is tied up in high-interest repayments, you are the ideal candidate for a refinance.
It is also designed for those who used an MCA as a 'bridge' during a credit-building phase. If your FICO has recently crossed into the 600s or 700s, you no longer need to pay the premium prices associated with the MCA market and should look for a more stable term loan or line of credit.
What you need to qualify
To successfully transition from an MCA to a cheaper product, you generally need to meet these minimum benchmarks.
| Requirement | Typical standard |
|---|---|
| Minimum FICO Score | 620+ (680+ for SBA) |
| Annual Revenue | $250,000 Minimum |
| Time in Business | 2 Years Minimum |
| Current Debt Status | At least 50% of MCA paid down |
| Bank Statements | 4-6 Months of clean history |
| Profitability | Must show positive net income on tax returns |
| Daily Balance | Average daily balance >$2,500 |
| Lien Status | No active tax liens or judgments |
Best funding options
Depending on your credit profile and time in business, these four products are the most effective tools for replacing an MCA.
Long-Term Refi
Convert daily withdrawals into manageable monthly payments with terms up to 5 years.
SBA Debt Refinancing
The gold standard for refinancing; use an SBA 7(a) loan to pay off high-interest debt at prime + 2.75%.
Revolving Credit Line
Replace a fixed-term MCA with a revolving line that you only pay for when you use it.
MCA Consolidation
Total debt restructuring for businesses with multiple MCA positions to lower the total debt-to-income ratio.
When this makes sense
- Your daily ACH payments are causing you to miss payroll or vendor payments.
- Your credit score has improved significantly since you originally took the MCA.
- You have paid off at least 50% of your current advance and want to save on the remaining cost.
- Your business is now consistently profitable and qualifies for bank-rate or SBA products.
When to be careful
- The current MCA does not offer a prepayment discount (you'll pay 'double' interest).
- The new loan's term is so long that you end up paying more in total interest than the MCA.
- Your current MCA provider has a strict 'no-subordination' clause that blocks new lenders.
- You are looking for 'more money' rather than just a lower rate; this can lead to a debt spiral.
Ready to Stop the Daily ACH Debits?
Stop the daily drain on your bank account. Our experts specialize in moving high-interest MCA debt into transparent, monthly-pay term loans. See your options in minutes with no hard credit pull.
Frequently asked
Common questions
Ready to Join the Hive?
Apply now via BeeLine™ and get your funding decision in minutes. Complete in less than 60 seconds.