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FAQ · Pricing · Updated 2026-06-25

What are typical MCA secondary market yields in 2026?

MCA secondary market yields in 2026 range 12-40% depending on paper quality. Performing whole-loan paper trades at 12-18% gross yield; sub-performing at 18-28%; distressed/charge-off paper at 25-40%. Senior ABS tranches yield 6.5-9%; mezzanine 9-13%; equity tranches 14-22%. Yields rose 200-400 bps from 2024 levels as defaults increased and capital became selective.

By Keerthana Keti3 min read

Quick answer

MCA secondary market yields in 2026 range 12-40% depending on paper quality. Performing whole-loan paper trades at 12-18% gross yield; sub-performing at 18-28%; distressed/charge-off paper at 25-40%. Senior ABS tranches yield 6.5-9%; mezzanine 9-13%; equity tranches 14-22%. Yields rose 200-400 bps from 2024 levels as defaults increased and capital became selective.

Full answer

Secondary market overview 2026. The MCA secondary market matured into a $4-6B annual transaction market by 2026, comprising whole-loan portfolio sales, residual interest sales, ABS tranche secondary trading, and distressed paper recovery sales. Yield ranges vary dramatically by paper quality and buyer type.

Performing paper yield ranges 2026. (a) Top-tier funder current paper (Credibly, OnDeck, Kapitus) — 12-15% gross yield. (b) Mid-tier funder current paper — 14-17% gross yield. (c) Sub-tier funder current paper — 16-19% gross yield. (d) Renewal-stage paper (60-80% of term elapsed) — 11-14% gross yield (lower duration risk). (e) New origination paper (0-30% of term elapsed) — 13-17% gross yield. (f) Premium for buyers: stable cash flow, predictable amortization, low default risk.

Sub-performing paper yield ranges 2026. (a) Early-stage delinquent (30-60 DPD) — 18-22% gross yield. (b) Mid-stage delinquent (60-90 DPD) — 22-26% gross yield. (c) Late-stage delinquent (90-120 DPD) — 24-28% gross yield. (d) Restructured/workout paper — 16-22% gross yield (lower variance). (e) Premium for buyers: cure-rate optionality, settlement potential, defensible legal positions.

Distressed/charge-off paper yield ranges 2026. (a) Default-status paper (120+ DPD) — 25-32% gross yield. (b) Charge-off paper (post-write-off) — 28-40% gross yield. (c) Judgment-supported paper — 25-30% gross yield (higher recoverability). (d) Stacked-merchant paper — 30-40% gross yield (complex priority issues). (e) Post-bankruptcy paper — 20-28% gross yield (limited recovery scenarios).

ABS tranche yields 2026. (a) AAA senior tranches — 6.5-7.5% (SOFR + 175-225 bps). (b) AA mezzanine — 7.5-9.0% (SOFR + 250-350 bps). (c) A mezzanine — 9.0-11.0% (SOFR + 425-550 bps). (d) BBB junior — 11-13% (SOFR + 650-800 bps). (e) BB/B equity tranches — 14-22% (subordinated, first-loss). (f) Tranche pricing affected by issuer credit quality, deal vintage, market conditions.

Yield drivers by buyer type 2026. (a) Specialty MCA buyers — target 25-35% gross yield on distressed; 15-20% on performing. (b) Hedge funds (Castlelake, Citadel) — target 20-30% gross yield across paper types. (c) PE credit funds — target 18-25% gross yield with secondary market exit. (d) Bank-owned credit desks — target 12-18% gross yield (low cost of capital). (e) Other MCA funders (renewal play) — target 15-25% IRR including renewal economics.

Yield comparison 2026 vs 2024. (a) Performing paper — 2026: 12-18% vs 2024: 10-15%. (b) Sub-performing — 2026: 18-28% vs 2024: 15-22%. (c) Distressed — 2026: 25-40% vs 2024: 20-32%. (d) ABS senior — 2026: 6.5-9% vs 2024: 5.0-7.5%. (e) Drivers: elevated base rates (SOFR ~4.5%), rising defaults (12-18% portfolio loss rates), selective capital availability.

Pricing dynamics 2026. (a) Bid-ask spread for performing paper — typically 50-200 bps. (b) Bid-ask spread for distressed paper — typically 300-800 bps. (c) Liquidity premium — distressed paper requires 300-500 bps yield premium over performing for similar duration. (d) Vintage premium — paper from 2022-2024 vintages (peak rate environment) trades at 100-200 bps discount to 2025+ vintages. (e) Concentration discount — large portfolios trade at 100-300 bps discount to smaller portfolios (fewer qualified buyers).

Trading volume 2026. (a) Whole-loan portfolio sales — $2.5-3.5B annually. (b) ABS secondary trading — $1.0-1.5B annually. (c) Distressed paper recovery sales — $400-600M annually. (d) Residual interest sales — $200-400M annually. (e) Total secondary market — $4-6B annually, up from $2-3B in 2024.

Merchant impact from secondary market yields 2026. (a) High secondary yields signal investor risk perception — may correlate with funder pricing pressure on new originations. (b) ABS tranche yields directly affect funder securitization economics — high yields mean tighter funder underwriting. (c) Distressed paper yields affect buyer aggressiveness on collections. (d) Performing paper yields affect renewal pricing — high yields mean tighter renewal terms. (e) Merchants benefit from tracking secondary market trends as leading indicator of MCA market conditions.

Bottom line. MCA secondary market yields in 2026 range 12-40% depending on paper quality — performing whole-loan paper 12-18%, sub-performing 18-28%, distressed/charge-off 25-40%. ABS tranches: AAA senior 6.5-7.5%, mezzanine 9-13%, equity 14-22%. Yields rose 200-400 bps from 2024 driven by elevated base rates and rising defaults. Buyer-type yield targets vary — bank desks 12-18%, hedge funds 20-30%, specialty distressed buyers 25-35%. Total annual secondary market volume $4-6B, doubled from 2024. Bid-ask spreads 50-200 bps performing, 300-800 bps distressed. Merchants should track secondary yields as leading indicator of MCA funder pricing pressure and collection aggressiveness.

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Methodology. Fundnode is an independent funding-platform that scores merchants against our 100-funder database. We earn referral fees from funders when merchants apply via Fundnode. Editorial rankings and answers are independent of fee structure. Updated 2026-06-25.