What Is an MCA Buyout?

An MCA buyout is a term used to describe replacing one or more existing Merchant Cash Advance positions with a different financing structure. It is not a single, standardized product. It's a review of a business's current short-term obligations, revenue, and cash flow to determine whether an alternative structure may be a better fit.

Where the Term Comes From

A Merchant Cash Advance is typically structured as a purchase of a portion of a business's future receivables, repaid through daily or weekly ACH payments. When a business is carrying one or more MCAs and the payments are creating pressure, a "buyout" refers to paying off — or replacing — those positions with another arrangement. The new structure might be a term loan, a line of credit, an asset-based facility, or another private credit structure, depending on what the business qualifies for.

What a Buyout Aims to Address

Businesses explore an MCA buyout for different reasons. Some are carrying multiple positions and want to consolidate them into a single obligation. Others want to move from daily or weekly payments to a structure with a longer, more manageable repayment timeline. The goal is generally to align the financing structure with the business's actual revenue and cash flow — not to guarantee any particular savings.

It Depends on Underwriting

Whether an MCA buyout is available depends on underwriting. A provider will review the business's revenue, the consistency of its bank deposits, its cash flow after existing obligations, its credit profile, the number and balances of existing positions, and the available financing programs. An MCA buyout is never guaranteed, and not every business will qualify.

An MCA Buyout Is Not an SBA Refinance

It's important to understand that an SBA loan is generally no longer an option for refinancing MCA debt. Under SBA SOP 50 10 8, Merchant Cash Advance and factoring arrangements became ineligible for SBA debt refinancing effective June 1, 2025. Businesses should not assume an SBA 7(a) or 504 loan can be used to buy out MCA positions. Read more in our article on SBA MCA refinancing rules.

What to Do Next

If you're carrying existing MCA positions, the first step is to gather your current agreements, recent bank statements, and the balances and payments on each position. You can use our MCA buyout calculator to estimate your current payment burden, then review your MCA positions with our team to see what alternatives may be available.