Welcome to Delancey Street. If you're reading this, you probably already know how expensive your merchant cash advance is. You signed for it because you needed the money fast, and now the daily ACH is bleeding your business dry. You're not alone in this.

Let's walk through your actual options, what each one requires, and who realistically qualifies.

Why Refinancing an MCA Is Harder Than You Think

Before we get into the 6 options, you need to understand something. MCA funders do not want you to refinance. Your MCA is profitable for them — extremely profitable. Factor rates of 1.3 to 1.5 mean they're collecting 30% to 50% on top of what they gave you, sometimes in as little as 6 to 12 months. That's not an interest rate. That's a margin most hedge funds would kill for.

And here's the part nobody talks about: almost every MCA agreement has a stacking clause. That means taking on new financing — even a refinance — without the lender's consent is technically a default. Read that again. The act of trying to get out from under the MCA can itself trigger the very consequences you're trying to avoid (acceleration of the full balance, UCC enforcement, frozen accounts, the whole playbook).

So the question isn't just "can I refinance." The question is "can I refinance without blowing up the MCA I already have." That's the real calculus.

Option 1: SBA Loan (7(a) or 504)

This is the gold standard. An SBA loan will give you the lowest rates (currently around 10% to 13% for a 7(a)), the longest terms (up to 25 years depending on the use), and the most breathing room. If you can get one, you should get one. Full stop.

The problem: SBA loans take 30 to 90 days to close. You need a credit score above 680 (realistically above 700 to be competitive), at least 2 years in business, clean financials, and no active defaults. If you're currently being hit with daily ACH debits from an MCA funder, your bank statements look like a warzone. SBA lenders see that. They don't like it.

Who this actually works for: Business owners who took one MCA, are still current on it, have decent revenue, and can survive the processing timeline without defaulting in the meantime. If that's you — move fast, and don't take on anything else while the SBA application is in process.

Option 2: Term Loan From an Alternative Lender

Companies like Funding Circle, Bluevine, OnDeck, and others offer term loans with fixed monthly payments (not daily ACH pulls). Rates range from 15% to 30% APR depending on your profile. That sounds high until you calculate what your MCA is actually costing you on an APR basis — which is often 60% to 200%+.

The math matters here. If you owe $80,000 on an MCA with a factor rate of 1.4 and a 9-month term, you're paying back $112,000. That's $32,000 in cost. A term loan at 25% APR over 24 months on the same $80,000 costs you roughly $22,000 in interest. You save $10,000 and you go from daily payments to monthly payments. That's real money and real breathing room.

The catch: You need revenue. Most alternative lenders want to see $15,000 to $25,000 per month minimum. They'll also check for existing liens (UCC filings from your MCA funder will show up), and some will require that the MCA be paid off at closing. That means the new lender sends the payoff directly to the MCA funder — you never touch it.

Option 3: Revenue-Based Financing (With Better Terms)

This one sounds counterintuitive. You're trying to get out of an MCA, and the option is… another revenue-based product? Yes. But not all revenue-based financing is created equal.

Some lenders offer revenue-based repayment structures with significantly lower factor rates (1.1 to 1.2 versus the 1.3 to 1.5 you're probably paying now), longer terms (12 to 18 months versus 6 to 9), and weekly instead of daily pulls. The daily ACH is what kills most business owners — switching to weekly alone can stabilize your cash flow enough to survive.

Be careful here. This is where the stacking clause becomes critical. If you take new revenue-based financing without paying off the existing MCA, you've technically defaulted on the first one. The new lender needs to pay off the old one as part of the deal. If they won't do that — walk away. You're just adding a second mouth to feed, and both funders will be pulling from the same bank account.

Option 4: Business Line of Credit

A line of credit is the most flexible option, and the one most people overlook. You draw what you need to pay off the MCA, then repay the line on your own schedule (within the terms). Rates for a business line of credit range from 10% to 25% APR depending on your creditworthiness, and you only pay interest on what you draw.

Why this works: You can use the line to pay off the MCA in one shot, eliminating the daily ACH immediately. Then you're making monthly payments on the line at a fraction of the cost. Some business owners use a line of credit strategically — pay off the MCA, stabilize cash flow, then pursue an SBA loan or term loan from a stronger financial position.

Why it's hard to get: Lines of credit require good personal credit (680+), established business history, and clean bank statements. If your MCA has been hammering your account with NSF fees and overdrafts for months, your banking history looks distressed. Lenders see that.

Option 5: Invoice Factoring or Accounts Receivable Financing

If your business has outstanding invoices (B2B, government contracts, construction, medical billing), you can leverage those receivables to refinance your MCA. Invoice factoring advances you 80% to 90% of the invoice value upfront. Fees are typically 1% to 3% per month, which is expensive but dramatically cheaper than an MCA factor rate.

This option works particularly well for: Construction companies, staffing agencies, trucking companies, and any business that invoices on net-30 or net-60 terms. You already have the money coming — you're just accelerating it.

The conflict: Your MCA funder likely has a UCC-1 filed against your receivables. That means they have a first-position lien on the very invoices you're trying to factor. The factoring company will see this and either decline you, or require that the MCA be paid off first (sometimes from the initial factoring advance). This is solvable, but it takes coordination.

Option 6: Negotiate a Settlement on the MCA (Then Refinance the Settlement Amount)

This is what we do at Delancey Street, and frankly, it's the option most business owners don't know exists.

Here's how it works: Instead of refinancing the full MCA balance, you negotiate the balance down first. MCA funders will settle — they do it more than you'd think. If you owe $100,000 and the funder accepts $60,000 as a settlement, you've just eliminated $40,000 in debt. Then you refinance the $60,000 settlement amount into a term loan or line of credit at a reasonable rate.

Why funders settle: Because the alternative is worse for them. Chasing a defaulted business through litigation costs money, takes time, and there's no guarantee they collect. A guaranteed $60,000 today is often worth more to them than a theoretical $100,000 over 18 months of legal proceedings. They know this. They just won't volunteer it.

The risk: If you try to negotiate a settlement yourself, you can accidentally trigger the enforcement playbook (frozen accounts, UCC intercepts, lawsuits against personal guarantors). MCA funders negotiate differently than traditional creditors. They move fast, they escalate fast, and they don't follow the same playbook as credit card companies or banks. This is where having an attorney matters — not because you need someone to write a letter, but because you need someone who understands the specific mechanics of MCA contracts and knows how to structure a settlement without triggering a catastrophe.

Which Option Is Right for You?

It depends on three things:

  • How many MCAs do you currently have? If you have one, your options are wider. If you've stacked 3 or 4 MCAs from different funders, refinancing gets exponentially harder — settlement is usually the better play.
  • Are you current or in default? If you're still making daily payments, you have time to pursue an SBA loan, term loan, or line of credit. If you're already in default or close to it, settlement is likely your fastest path out.
  • What does your revenue look like? Every refinancing option requires some level of provable revenue. If your business is generating $20,000+ per month, you have options. If revenue has cratered, settlement might be the only realistic path.

The Bottom Line

You took the MCA because you needed to. That's not a character flaw, it's a business decision made under pressure. But staying in the MCA when cheaper options exist — that's a choice. And it's one that costs you real money every single day that ACH hits your account.

If you're behind on payments, or you're current but drowning, or you just want to understand what getting out looks like — talk to someone who actually does this work. Not a broker. Not another funder. Someone who understands the contracts, the UCC filings, the settlement mechanics, and the enforcement timelines.

That's what we do.

Let's settle this: | 888-693-8608