MCA during bankruptcy emergence — the merchant's funding guide.

The 60-second answer

Bankruptcy is not a permanent disqualification from MCA funding. It is a significant credit event that pushes you into the high-risk underwriting tier — where factors are higher, advances are smaller, and only a subset of funders will consider you at all. The good news: MCA underwriters care more about your post-discharge bank statements than your bankruptcy filing date.

The strategy: stabilize the business under the post-discharge entity for 6–18 months, build a clean deposit pattern, pay vendors on time, then approach the 5–8 funders who have published track records of approving post-bankruptcy merchants.

Chapter 7 vs. Chapter 11 vs. Chapter 13 — why the chapter matters

Chapter 7 (liquidation)

For a business, Chapter 7 means liquidation. The entity dissolves. There is no "post- discharge MCA" for the bankrupt entity because the entity no longer exists. If you're asking about MCA funding after a personal Chapter 7, you're typically operating a new entity that you formed post-discharge — and the MCA underwriter will treat the new entity on its own deposit history, not your old personal filing.

Personal Chapter 7 discharge stays on personal credit for 10 years. MCA underwriters weight bank statements over personal credit, so this is recoverable.

Chapter 11 (business reorganization)

The business survives — restructured. You emerge with a confirmed plan of reorganization and reduced obligations. The original entity continues. MCA underwriters will look at: (a) how clean your post-confirmation bank statements are, (b) whether you have residual plan-payment obligations that consume monthly cash flow, and (c) whether any DIP lender or plan administrator has a senior lien position that conflicts with their UCC-1 ambitions.

Most MCA funders will wait 12–18 months after plan confirmation before underwriting. A handful will look at 6 months.

Chapter 13 (personal reorganization)

A 3–5 year repayment plan administered by a court-appointed trustee. Some MCA funders consider Chapter 13 merchants during the plan if the business is generating clean deposits separate from the personal repayment. Expect a higher factor (1.42+) and a requirement that the trustee not place a lien on business receivables.

The underwriting reality post-bankruptcy

MCA underwriters look at three signals when evaluating a post-bankruptcy merchant:

1. Time since discharge. 12+ months is the threshold for most mainstream MCA funders. 6 months is the floor for the few specialty post-bankruptcy desks. Under 6 months and you're generally looking at niche funders with much higher factors.
2. Bank statement quality post-discharge. Clean daily balances, no NSFs, consistent deposit rhythm, no unusual transfers. Underwriters spend more time on statements for post-bankruptcy merchants than for any other category.
3. Operational stabilization narrative. Why did you file? What changed? What's different about the business now? A merchant who can articulate this in a one- page cover letter often gets approved when an identical merchant who can't gets declined.

Pricing reality for post-bankruptcy MCAs

• Factor: 1.38 to 1.55 (vs. 1.22–1.35 for standard underwriting)
• Term: 6 to 9 months (longer terms come back after 24 months of post-discharge stability)
• Advance size: Capped at 60–80% of trailing 30-day deposits (vs. 80–125% standard)
• Holdback: 9–14% of daily deposits
• Origination fee: 3–5% deducted from gross funding (vs. 1–3% standard)
• Personal guaranty: Always. Often with broader collateral language than a standard MCA.

APR-equivalent on a 1.50 factor over 7 months exceeds 130%. This is expensive recovery capital. The math only works if the working capital generates returns that exceed the cost — typically inventory for a confirmed large order, or a payroll bridge to a known receivable.

The pre-application checklist

Before you fill out any MCA application post-bankruptcy, prepare:

• 6+ months of clean post-discharge bank statements. No NSFs, no overdrafts, no unusual transfers. If you can't show this, wait another quarter.
• A one-page operational narrative. Why you filed, what's changed, what the business looks like now. Two paragraphs.
• Plan-payment documentation. If you're in a Chapter 11 plan or Chapter 13 trustee plan with ongoing payments, document the monthly amount and the time remaining.
• Trade-credit references. Two or three vendors who'll vouch for your payment timeliness post-discharge.
• Tax filings post-discharge. Underwriters want to see you've kept up with quarterly taxes since emergence.
• The bankruptcy discharge or confirmation order. A copy of the court document.

Funder shortlist for post-bankruptcy merchants (2026)

The following funders have published track records of approving post-discharge merchants. None of this is a recommendation — terms vary case by case. Use as a starting shortlist.

• CFG Merchant Solutions. Considers 12+ months post-Chapter 11 confirmation with clean deposits. Factor typically 1.42–1.49.
• Credibly. Considers 6+ months post-personal-Chapter-7 if business entity is new and generates >$25K/month deposits.
• Rapid Finance. Considers 9+ months post-Chapter-11 with verifiable plan-payment status.
• Greenbox Capital. Considers 12+ months post-discharge across all chapters. Smaller advance amounts.
• National Funding. Considers 18+ months post-Chapter-11 with renewed trade references.

Funders that will not consider post-bankruptcy merchants in 2026 include OnDeck, BlueVine, and most bank-affiliated lenders. Don't waste an application slot on declines.

Stacking risk post-bankruptcy

Merchants emerging from bankruptcy are statistically more likely to take a second MCA within 90 days of the first — and the second MCA is the single most common precursor to a second bankruptcy filing. The underwriter on your first post-discharge MCA knows this and will price for it.

Do not stack. If the first MCA runs short of what you needed, restructure your operations to fit the capital you have. A second MCA on top of post-bankruptcy fragility is the textbook setup for a Chapter 11 conversion or a refile.

When to wait instead of apply

• You're less than 6 months post-discharge with sub-$25K/month deposits
• You have any NSFs in the last 60 days
• You have an active plan-payment obligation consuming >15% of cash flow
• You can't articulate a clear narrative for what changed post-discharge
• You have any second MCA, even a small one, on the books

Waiting 90 more days to build clean statements often unlocks dramatically better terms.