How do you refinance a merchant cash advance?
Last updated: October 12, 2026. SBA rules checked against SOP 50 10 8.1. General information, not legal advice.
You don't refinance a merchant cash advance the way you refinance a loan. You replace it. Get a written payoff letter, then use a bank or credit-union term loan, a line of credit, or equipment or invoice financing to pay the advance off, and confirm the debits and the UCC filing are released. An SBA 7(a) loan usually can't be used.
At a glance
| Path | When it can work | Watch-outs | Deeper guide |
|---|---|---|---|
| Bank or credit-union term loan | Steady deposits, advance current, cash flow covers a monthly payment | Total dollars repaid, personal guarantee | Where to get business funding |
| Business line of credit | Lumpy cash flow, smaller balance | Draw fees, renewal terms | Where to get business funding |
| Equipment or invoice financing | You own equipment or have B2B invoices | Cost tied to the asset or invoice discount | How invoice factoring works |
| SBA 7(a) | Only if the advance was converted to a term loan, amortized 24+ months, no new advance since | Factoring never qualifies | SBA 7(a) MCA refinance rules |
| Funder converts it to a fixed-payment term loan | No outside lender says yes yet | Get the signed note; starts the SBA 24-month clock | SBA 7(a) MCA refinance rules |
| Another or "consolidation" advance | Almost never a real refinance | More MCA debt, often a new fee | MCA alternatives |
Why "refinance" really means replace
An MCA is a purchase of your future sales, not a loan. There's no rate to lower. You pay off what's owed with new money and close the old agreement.
Step by step
Read your contract. Find the early-payoff terms and any prepayment discount. See MCA contract clauses.
Get a written payoff letter from each funder, good through a specific date.
Total every position if you stacked.
Gather 3-6 months of bank statements. Many lenders ask for them (a typical range, not an SBA rule).
Compare offers on total dollars repaid, fees, payment frequency and personal guarantee with the cost of capital calculator.
The new lender wires the payoff to the funder.
Confirm in writing that the ACH debits stop and the UCC-1 is terminated. Watch for a debit after payoff.
Here's a hypothetical. Juniper Lane Bakery, a made-up business, owes $38,000 on one advance with a $640 daily debit. Its payoff letter is good through the 30th. A credit union approves a $40,000 term loan at about $1,050 a month (an example, not a quote). The extra $2,000 covers closing costs. The daily debit stops, and the owner gets the UCC-1 termination in writing.
The SBA rule, stated correctly
Some sites say SBA can never pay off an MCA. That's not what the current SOP says. Under SOP 50 10 8.1 (effective October 1, 2026), an active MCA cannot be refinanced with a 7(a) loan. Appendix 14 makes one eligible only if all three are true: the agreement was converted to a term loan, that term loan has amortized for at least 24 months, and no new advance has been signed since the conversion. Factoring agreements are never eligible. The debt must also have been current for the last 12 months, and the new 7(a) payment must be at least 10% lower. Details on SBA 7(a) MCA refinance rules. To find an SBA lender yourself, use Lender Match.
When no one will refinance yet
Stop stacking: one new advance resets your options. Ask your funder about converting to a fixed-payment term loan. If a debit is about to bounce, read behind on an MCA.
Red flags in "refinance" pitches
A new advance sold as consolidation. Under SOP 50 10 8.1 Appendix 14, a new advance after conversion makes that debt ineligible for 7(a) refinancing.
A pitch that says SBA can pay off your active advance now. Appendix 14 says it can't.
"Debt relief" that tells you to stop paying. See our fake MCA debt relief report.
A flood of calls after one form. See why brokers call you and stop MCA broker calls.
More: business funding without a broker and the MCA questions merchants actually ask. Ready to compare options? Start with where to get business funding.
Sources
SBA, SOP 50 10 8.1 (effective October 1, 2026), Appendix 14: https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs
SBA 7(a) loans: https://www.sba.gov/loans/7a-loans/
SBA Lender Match: https://www.sba.gov/loans/lender-match/
13 CFR 120.201: https://www.ecfr.gov/current/title-13/section-120.201