Can I get or maintain an MCA during a government shutdown?

Full answer

Why MCAs keep funding during shutdowns. MCA funders (Credibly, OnDeck, Greenbox, Forward Financing, Kalamata, etc.) are private companies with private capital. They don't require federal agency approvals or government-backed guarantees to fund. The 2018-19 35-day shutdown, the 2013 16-day shutdown, and brief 2025 shutdowns all saw uninterrupted MCA funding while SBA-backed loans froze entirely.

What freezes during a shutdown. (1) SBA 7(a) and 504 loan approvals freeze immediately — applications stack up but cannot fund. (2) USDA Rural Development loans freeze. (3) EIDL disaster loan approvals freeze (relevant after natural disasters during shutdowns). (4) Government contractor invoice payments delay (federal vendors don't get paid on time). (5) Federal grant disbursements halt. (6) Some bank-issued loans that require federal guarantees delay. MCAs do not freeze.

Impact on merchants with federal-contract revenue. If 20%+ of your revenue comes from federal contracts (e.g., GSA contractors, defense subcontractors, federal facility food service), shutdown-related payment delays can drop your monthly deposits 30-60%. If you have an active MCA, your daily remit obligation does not pause automatically — you'll burn through cash reserves faster than budgeted. Action: contact your MCA funder within 1 week of the shutdown starting to request reconciliation (reduced holdback) for the duration of the disruption.

How reconciliation works during shutdowns. Most MCA contracts include reconciliation provisions: if your revenue drops materially, you can request a reduced daily holdback for a defined period (typically 30-90 days). To invoke: (1) submit a written request to the funder's servicing team, (2) include 4 weeks of bank statements showing the revenue drop, (3) explicitly cite the shutdown as the cause, (4) request a specific holdback adjustment (e.g., 'reduce from 12% holdback to 6% for 60 days'). Funders generally honor reconciliation requests when documented — denying them creates litigation risk and reputational damage.

Funders known to be flexible during shutdowns. Forward Financing, Credibly, Kalamata, Newco, and Greenbox have historically granted reconciliation requests for shutdown-affected merchants. Higher-aggression funders (some bottom-tier MCA shops, payday-style funders) are less flexible — if you're with one, expect resistance and document everything in writing.

Getting NEW MCA funding during a shutdown. Application volume sometimes SPIKES during shutdowns as SBA-blocked merchants pivot to MCAs. Approval criteria don't change — you still need 6+ months operating, $10K-$15K/mo revenue, 500+ FICO. Approval and funding timelines remain 1-3 business days. The one wrinkle: if your most recent bank statements show shutdown-driven revenue drops, funders may underwrite to the lower revenue figure. Apply early in the shutdown (before revenue impact shows) if possible.

Documents to gather during a shutdown. (1) 3-6 months of bank statements (showing pre-shutdown revenue baseline). (2) Federal contract documentation (if applicable) showing the revenue source that's been paused. (3) Communication from federal contracting officer confirming the payment delay. (4) Any state-level disaster declaration or shutdown-relief letter that applies to your business. These accelerate reconciliation requests and new applications.

Lendio, NerdWallet, and broker behavior during shutdowns. Brokers see application volume spike and may push merchants toward stacking (taking a second MCA on top of an existing one) to bridge the shutdown. Stacking during a revenue disruption is usually a trap — you'll have higher combined daily remits exactly when revenue is lower. Better path: reconciliation on the existing deal + bridge financing only if absolutely necessary, ideally from your existing funder.

SBA loan applications during shutdown. If you submitted an SBA loan application before the shutdown, it pauses but does not get rejected. Continue to gather documentation and respond to lender requests so you're ready to close the day the SBA reopens. If you have not yet applied for SBA, consider whether the timeline still makes sense — if the shutdown drags on for 30+ days, SBA may be 60+ days away from your funding decision. Bridge with an MCA if needed and request prepayment terms.

Long-term relief options post-shutdown. After previous shutdowns, Congress has passed back-pay legislation and small business relief packages (PPP-style during COVID, smaller targeted relief during other shutdowns). Watch SBA.gov and SBDC announcements for relief programs you may qualify for once the shutdown ends. MCA funders may also offer voluntary payment deferrals or factor discounts for affected merchants who request them.

Bottom line: MCAs are essentially shutdown-proof on the funding side, but merchants with shutdown-exposed revenue need to invoke reconciliation early to avoid cash flow disaster. Document the disruption, request relief in writing, and avoid stacking as a 'bridge' — it usually makes things worse.

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