How to Get Out of Merchant Cash Advance: 6 MCA Relief Strategies

I’ve talked to business owners who felt relief when that merchant cash advance finally hit their account. But now, the pressure’s back. If you’re struggling to keep up with daily payments, you’re not alone. MCA loans are notoriously tough to escape, but there are ways to regain control.

In this guide, I’ll walk you through six proven strategies to reduce or get out of your MCA agreement, starting with the steps that typically work best and ending with one to only use as a last resort.

Table of Contents

1. 1. Renegotiate
2. 2. Liquidate assets
3. 3. Business loan alternative
4. 4. Personal loan
5. 5. MCA relief company
6. 6. Bankruptcy
7. FAQ
   1. Does debt relief hurt credit?
   2. Is MCA debt relief a good idea?
   3. What are the pros of debt relief?
   4. What are the cons?

1. Renegotiate with the MCA company

If you need MCA debt relief, the first step is to read the terms of your MCA agreement and call your merchant cash advance company. Typically, MCA agreements state that the company can only take a portion of sales. If your business revenue is down, the company should lower your monthly payment.

As you can see below, a recent Reddit thread listed a few tips for successfully negotiating a merchant cash advance restructure:

• Be prepared to provide business and personal bank statements and explain why you’re having trouble making payments.
• Don’t be aggressive or demanding. Providing documentation and working with the MCA company in a professional manner gives you the best chance of getting merchant cash advance relief.

Multiple MCA Loans while running out of cash?
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2. Liquidate assets

Another way to inject cash into your business and to get MCA relief is to sell business assets.

If you have vehicles, machinery, inventory, real estate, or other valuable items, consider selling them to settle your debt. Depending on your business, you may also own intellectual property, such as patents, that other companies might want to license or buy.

Personal assets

Although you don’t need to sell your personal assets to repay MCA loans, you can if you have valuable items you no longer wear or use, like jewelry. Sometimes, it’s better to pay down what you owe to relieve stress while running your business.

3. Consolidate with a business loan alternative

If you don’t have assets to sell, another strategy is to take out a different type of business loan, such as an SBA loan or business line of credit. Many people take out merchant cash advances because there are few qualifications, and companies can get a fast cash infusion. However, other business loan options may offer better terms, even if the process to get one takes longer.

Consolidating your MCA debt into a different type of business loan or line of credit can lower your interest rate and also make managing your business finances easier. MCA lenders can withdraw daily payments from your business bank accounts, whereas a business loan will have a set monthly payment.

You can use a marketplace like LendingTree to compare multiple lenders at once, or research your options with the SBA loan office to find out whether you qualify. Eligibility requirements for SBA loans include being creditworthy, located in the United States, and meeting the business size requirements.

4. Take out a personal loan

If you have a good personal credit score, another option is to apply for a personal loan. The benefit of taking out a personal loan to pay off your MCA debt is that personal loans typically come with fixed interest rates and a set repayment schedule. That can reduce money anxiety and help you to have a more predictable cash flow.

The drawback to using a personal loan to pay off a business MCA is that you’ll move your business debt into your name, meaning if you’re late on payments or default on the loan, it will damage your personal credit score.

If you’re aware of the drawbacks but want to get debt relief through a personal loan, apply with at least three of the best personal loan companies.

If possible, prioritize lenders that don’t charge origination fees, including SoFi and PenFed . That way, you won’t owe additional lender fees on top of the debt and interest.

5. Negotiate with an MCA relief company

If you need more support or someone to negotiate on your behalf, you can work with an MCA debt settlement company to get debt relief. These companies will review your business finances and may ask you to change banks so MCA companies can’t withdraw payments. This makes MCA lenders more likely to negotiate a settlement, but it can damage your credit.

I contacted the debt relief companies LendEDU has reviewed, and three—National Debt Relief, Freedom Debt Relief, and CuraDebt—advised that they offer merchant cash advance help to business owners who qualify.

Senior Communication Manager at National Debt Relief, Renee Oehlerking, explained that NDR will review your original MCA loan agreement first to determine whether the company can assist you.

Before working with a debt relief company, ask about their fees, read the fine print, and make sure you understand the pros and cons.

Consider working with an attorney

Additionally, some attorneys specialize in merchant cash advance debt relief. It’s important to find a reputable company, one that can help you find out how to get out of a merchant cash advance.

Here are two companies that have earned positive Trustpilot ratings:

• Coastal Debt: Trustpilot rating of 4.8/5 (318 reviews)
• Delancey Street: Trustpilot rating of 4.6/5 (22 reviews)

6. File for bankruptcy

If you aren’t able to lower your MCA payments or reach a settlement, a last resort is to file for bankruptcy. However, consult a bankruptcy attorney first and let them know you have a merchant cash advance. Some courts consider MCAs a loan, while others do not, which can complicate the bankruptcy process.

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If a client came to me with this situation, I’d recommend starting with selling business or personal property, assuming it wouldn’t hurt operations or financial stability. If the business is fundamentally sound but facing a short-term cash crunch, a business loan could also make sense.
I’d only suggest exploring other options after these because they tend to carry greater long-term risks to the business or the individual.

FAQ

Does debt relief hurt credit?

Yes, working with a debt relief company can hurt your credit. Debt relief companies typically ask that you stop making payments so that lenders are more likely to negotiate a settlement.

Is MCA debt relief a good idea?

If you’re not sure whether debt relief is a good idea for your business, analyze your business cash flow first. Can you make adjustments before getting help from a debt settlement company? For example, see if you can sell assets, increase revenue, or cut payroll before moving on to a debt settlement negotiation.

If you need a second opinion, you can get a free session with a financial advisor (no strings attached) using Money Pickle.

What are the pros of getting merchant cash advance debt relief?

There are several pros and cons of debt relief. The biggest benefit is that you can eliminate financial stress. Merchant cash advances can be a difficult cycle to break, so debt relief can help you get your business finances back on track. Sometimes, you can even settle for less than you owe.

What are the cons of getting merchant cash advance debt relief?

The drawback to getting MCA debt relief is that it can damage your credit. Working with a debt relief company or a debt relief attorney also comes with high fees. It can also be stressful if you need to change your business bank accounts or wait for lengthy legal battles to resolve.

Recap of options to get out of an MCA

Strategy	Main benefit	Considerations
Renegotiate with the MCA company	May reduce payments based on revenue	Requires clear documentation and cooperative communication
Liquidate assets	Turns business or personal assets into cash	May affect operations or personal lifestyle
Consolidate with a business loan	Replaces MCA with lower-interest financing	Requires business credit and time for approval
Take out a personal loan	Simplifies debt under fixed terms	Moves business debt to your name and affects personal credit
Work with an MCA relief company	Professional help to negotiate settlement	Can hurt credit; comes with fees and potential account changes
File for bankruptcy	Final option for full debt relief	May be complicated; consult a bankruptcy attorney