MCA and Business Debt Consolidation and Restructuring

MCA Debt Consolidation refers to strategies used to manage and reduce debt related to Merchant Cash Advances (MCAs). These are short-term financing options where businesses receive a lump sum in exchange for a portion of future receivables (usually daily or weekly withdrawals).

If you're looking into MCA debt consolidation, here’s what you need to know:

What Is Debt Consolidation

MCA debt consolidation involves combining multiple merchant cash advances or refinancing one large MCA into a more manageable financial product. This is done to reduce:

  • Daily/weekly payment burdens

  • High effective interest rates (often 60–200%+ APR)

  • Risk of default or legal action

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Options For Consolidation

 

  • Business Debt Consolidation Loan

    • Traditional bank or SBA loan (difficult to qualify for)

    • Alternative online lenders

    • One new loan to pay off MCA(s), usually at a lower rate

  • Reverse Consolidation (Restructuring)

    • A third-party lender sends daily payments to your MCA companies on your behalf

    • You make one smaller, daily payment to the third-party

    • This does not reduce the total debt, but improves cash flow

  • Debt Settlement or Negotiation

    • Work with a debt relief firm or attorney to negotiate lower payoff amounts

    • Often involves defaulting on MCA, which can trigger legal action

    • Risky but effective if you’re already in deep financial trouble

  • Revenue-Based Financing or Business Line of Credit

    • Use a lower-cost product to pay off higher-cost MCAs

    • Only works if your business is still generating solid revenue

 

Example

Current MCA debt:

  • 3 MCAs totaling $100,000

  • Daily payments: $1,000+

After consolidation:

  • 1 loan of $100,000 at 18% APR over 24 months

  • Monthly payment: ~$5,000

  • Daily impact: ~$230

  • Improved cash flow: +$770/day