Owners ask us what an MCA relief program looks like month by month in 2026. You don’t get a fixed number of months up front because there’s no fixed answer, and we don’t promise any such thing, but this is the sequence of events we generally follow. Every business is unique and every debt is unique.
Before month one, it helps to know how you got here. According to one study, around 82% of small businesses that close do so because of cash flow issues. Owners tend to say, “Cash flow got tight, and we needed money right away to stay afloat.” That is exactly the gap an MCA fills. Some estimates say as many as 84% of applications are approved (compared with 68% at traditional banks and 65% for SBA loans), and many funders can close in a day or two. For owners with a less than perfect credit history who need funds right away, an MCA might be a good choice. While MCAs can be a viable financing solution, they are not the right solution for every business.
Merchant cash advances are not bank loans. A funder gives a lump sum, and in return, takes a lien on your receivables or buys them outright. It can even take a piece of your debit and credit card sales. You owe them an origination fee, a funding fee and an administrative fee. There’s no interest, just a factor rate (usually between 1.1 and 1.5) and daily or weekly automatic withdrawals straight from your bank account, and that repayment period is often shockingly short. Let’s put this into perspective. Take a $100,000 advance at a factor rate of 1.5 with a 15-month term. That’s roughly a 40% annual interest rate. Expensive financing, no?
The First Consultation Is Always Free and Confidential
Month one starts with a conversation. The first-month project is to get the facts straight. The first consultation is always free and confidential. If there’s no chance of winning or a less expensive solution is available, we’ll tell you straight away on the first call. The fee is a single percentage of the total debt we enroll and it’s quoted in writing before we start working on the account.
Negotiate Something Less than the Full Amount Owed
In the months that follow, the work is negotiation. Our senior advisors then start working with each funder and lender to negotiate something less than the full amount owed, rather than trying to create a new loan. Some funders might be willing to temporarily adjust the payment schedule just to keep you from going under immediately. But not all of them will. You’d better read the agreement carefully - it often has some pretty severe consequences for default.
That risk runs underneath every month of the process. If a default happens, the funder often tacks on fees and penalties that cause the debt to jump sharply right away. Many agreements will have the business and personal guarantors sign a confession of judgment. This allows the funder to obtain a judgment against the business and/or its guarantors immediately upon a default. Funders can rush in with an Article 9 UCC demand letter to any customer of the defaulting business, demanding they send any payments over to the funder instead. That sounds crazy, right?
In Bankruptcy
And if, at any point, bankruptcy looks like the better path? We’re not a law firm. If bankruptcy (like Subchapter V) or litigation is the right route, we’ll refer you to a vetted independent attorney. Even there, an MCA raises hard questions. In bankruptcy, the big battle is whether the MCA counts as a genuine sale of accounts receivable or if it’s a secured loan. Business owners often prefer to treat it as a loan; funders fight that. If the court treats it as a secured loan, the funder may have a claim against the receivables, but the business can still use those receivables to reorganize. The funder ends up competing with other secured creditors, subject to priority rules, and possibly a cram-down. And the automatic stay covers the funder, too. Under a true sale, the receivables may no longer be part of the bankruptcy estate and thus unavailable to the business to help it reorganize. The automatic stay won’t prevent the funder from collecting on them after the filing, and the funder may even be able to avoid the bankruptcy altogether. So how do courts figure out whether a transaction is a sale or a loan? They look at the contract language, the funder’s rights and remedies in the event of default, and the parties’ conduct during the transaction.
Debt relief isn’t the right answer for every business. But if another daily debit is about to hit your account, the worst thing you can do is wait. The best thing you can do is act.
