Insights · MCA consolidation

Four advances and a bank that said no: how a consolidation refinancing gets done

Certus Credit · 9 November 2026 · 5 min read

Take a distributor doing $6M a year. Two years ago a slow quarter hit and the owner took a merchant cash advance to make payroll. It worked, so the next gap got another, and a third covered the first two. Today there are four. Debits leave the account every business day, and the bank that has held the operating account for a decade just declined a line of credit without saying why.

Here is what those four advances look like once somebody adds them up.

The arithmetic nobody has done

Advance one: $212,000 outstanding, $9,800 a week. Advance two: $146,000, $7,300 a week. Advance three: $98,000, $5,900 a week. Advance four: $61,000, $4,100 a week. That is $517,000 of balances and $27,100 leaving every week, which comes to about $117,000 a month on a business that collects about $500,000 a month. Twenty-three cents of every dollar that comes in goes back out to the MCA companies before rent, payroll or suppliers see it.

Now replace all four with one term loan of $560,000, enough to pay every advance off in full and leave a small cushion, over 36 months. Put the rate at 20% for the sake of the arithmetic. The lender's own pricing replaces it. The payment is about $20,800 a month, once a month, on a date the owner can plan around. The business keeps roughly $96,000 a month that it was not keeping before.

That loan is not cheap money. It costs a fraction of what the advances cost, and that is the comparison that matters.

Most owners in this position have never seen those two numbers side by side. The distance between $117,000 and $20,800 is usually the whole argument.

Why the bank said no

The owner hears the decline as a verdict on the business. It almost never is. It is the UCC filing.

Each MCA company files a UCC-1 against the business when its advance funds, and the first to file sits in first position on all of the company's assets. A bank or SBA lender will not lend behind that, because in a default it would stand second in line to a contract that takes a share of every day's receipts. So the bank passes, and the owner is told it was a credit decision when it was a lien decision.

The advances also make the statements look worse than the business is. A lender reading the bank activity sees daily debits and reads a company bleeding cash. What it is looking at is the cost of the advances, not the earnings of the company.

What the new lender checks

A lender taking out stacked advances underwrites the business as it will be after they are gone.

It rebuilds operating cash flow with the debits removed: revenue, margin, payroll, rent, the ordinary costs of the business, and nothing else. On a sound company that figure is far larger than the statements suggest, and it is the number the new loan has to be serviced from. In the example above, the $117,000 a month that stops leaving is counted as available to carry the $20,800.

It wants every position on paper: each agreement, each UCC filing, and a payoff letter from each MCA company stating the balance as of a date. At closing the loan pays each one directly and the filings are terminated. The business ends the day with one lender and one lien.

It wants the advances current, the books closed monthly, and the business of a certain size. Two to four positions is workable. More than that is harder, not impossible.

Why owners wait

Almost everyone who ends up here waited too long, for the same four reasons.

The renewal. The MCA company offers to renew the advance with a little extra cash on top, and the owner takes it because the money is there today. A renewal resets the cost on the whole balance. It is the most expensive decision in this process and the one most owners make.

The phone. It rings all day with offers of another advance, so every call about the debt gets treated as a sales call, including the one that would end it.

The fear that the MCA companies will find out. We do not contact an owner's MCA companies or bank without their say-so. Payoff letters are requested when the loan is ready to close, not before.

The books. A company fighting daily debits has often stopped closing its months, and the lender needs monthly financials. This is the first thing to fix, and it is fixable.

How it runs

The enquiry takes a few minutes and asks about the business, the advances and the bank. An assessment call follows, and it ends with a plain answer about whether this is a file we can take on.

If it is, the documents come next: bank statements, the MCA agreements, the monthly financials. From those we build the payoff map, a one-page version of the arithmetic above using the owner's own figures, and send it before the second call. The second call walks the structure. If the owner wants to proceed, the file goes to the lender and the owner meets the lender with us on the line.

A complete file is read in days. Closing follows the lender's diligence and the payoff letters. Through all of it the owner has one job: run the business and do not take another advance.

One lender, one payment

The advances are gone. The filings are terminated. The business pays once a month, and the next time it asks its bank for a line there is nothing sitting in first position to stop it.

If you are carrying advances on a business doing over $1M a year and want to know whether a consolidation fits, the enquiry at certuscredit.com/recast is where it starts. It is confidential, and we will tell you plainly where the file stands.