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Playbooks 6 min read Updated August 1, 2026

How to Escape a Merchant Cash Advance

Daily ACH debits on a $150k MCA can drain $3k a day out of the operating account. If you're invoicing B2B, you almost certainly have a cheaper option sitting in your AR aging report—you just need a funder willing to net-fund the MCA payoff at close.

Step 1: Get the payoff letter

Call the MCA funder and request a payoff good through the next Friday. Get it in writing. If you have multiple advances (stacked), get letters for all of them.

Step 2: Assemble the file

AR aging (current), most recent three months of bank statements, sample invoices with POs, top-customer list, and articles of incorporation. That's it.

Step 3: Structure the payoff

The factor calculates advance on your book. If the initial advance covers the MCA payoffs plus a working-capital pad, the deal closes and the MCA is wired off at funding. If it doesn't quite reach, we sometimes stage payoffs over 30–60 days from ongoing invoice advances.

What it costs vs. the MCA

A typical MCA at 1.35 factor rate over 8 months is roughly 65%+ effective APR. Factoring the same receivables usually lands 15–25% APR-equivalent. Every dollar of ongoing daily debit stops immediately.

Frequently Asked Questions

We've closed refis on stacks of 5+ advances. It requires clean AR, honest disclosure of all balances, and sometimes staged payoffs.

Yes, but underwriting weight is on your customers—not your score.

Once the factoring facility funds, the MCA is wired off the same day and the daily ACH debits end immediately. Onboarding to first funding typically takes 1–2 weeks.

Some MCAs include clauses that make refinancing awkward, but a written payoff letter is enforceable. We work with counsel when a funder gets aggressive about UCC positions.

We stage payoffs — pay off the most expensive advances first out of the initial funding, then knock out the rest over 30–60 days as invoices fund. Not every stack can be untangled, but most B2B shops can.

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