Should I pay off my MCA with another loan? The honest refinance math.

The 60-second answer

Refinancing an MCA only saves money in two situations: (1) your MCA funder offers a prepayment discount, or (2) you're using a substantially cheaper product (SBA at 11% APR, an LOC at 18% APR) and the MCA fee structure or term is destroying your cash flow.

In every other case, you're either (a) paying the same fee twice or (b) trading one form of pain for another. The single most important question to ask before refinancing: "what does my current MCA contract say about prepayment?"

Step 1: read your prepayment clause

MCA contracts handle early payoff in one of three ways. Find the section labeled "Prepayment," "Early Payoff," or "Discount Schedule":

• No discount. The full factor is owed regardless of how fast you pay off. This is the most common structure — roughly 70% of MCAs in 2026.
• Tiered discount. Pay off in 30 days = X% off the remaining payback, 60 days = Y%, 90 days = Z%. Credibly publishes schedules like this. Math is favorable for fast payoffs.
• Interest forgiveness on remaining term. Rare but real. CFG Merchant Solutions and a few others compute "earned vs unearned" fees and refund unearned fees on prepay.

If your contract is in bucket 1, refinancing only saves money on cash-flow grounds (reducing the daily ACH) and on opportunity cost (freeing capital for higher-return uses). The fee itself is sunk.

Step 2: do the four-number math

Before signing any refinance, write down four numbers:

1. Current MCA payoff amount. Call the funder and ask. This is the actual dollar amount required to close out today — including or excluding any prepay discount.
2. Current MCA remaining payback. What you'd pay if you let the daily ACH run to term. Often higher than the payoff amount even without a discount, because some funders charge "early closure" fees rather than discounts.
3. New loan total cost. New loan principal + interest + origination fees + closing costs. Run this through an amortization calculator.
4. New loan monthly outflow. Compare against current daily MCA outflow converted to monthly (daily ACH × 22 business days).

The refinance is worth doing if (3) is less than (1) by enough margin to cover your time and the application risk. Or, if (4) is meaningfully less than the current monthly MCA outflow, and the cash-flow relief is what you actually need.

Worked example: a trucking company with $52K MCA balance

Owner-operator trucking company took a $60K MCA at a 1.34 factor in January 2026. Total payback was $80,400, daily ACH $325, 12-month term. By June 2026, they've paid 5 months — about $32K in ACH — and the remaining payback balance is $48,400.

The funder offers no prepayment discount. The remaining balance is $48,400 owed over 7 more months at $325/day.

Option A: SBA Express loan refinance

• SBA Express, $50,000, 24-month term, 13% APR
• Origination fees: $1,500
• Total cost over 24 months: $57,100
• Monthly payment: $2,380
• vs current MCA monthly outflow: $325 × 22 = $7,150
• Monthly cash-flow relief: $4,770
• Net cost vs letting MCA run: +$8,700 (more expensive)

The SBA refinance costs $8,700 more in total interest, but frees up $4,770/month in cash flow for 24 months. For a trucking company that needs working capital to make payroll and cover fuel, that monthly relief is worth more than the $8,700 in spread-out fees. The refinance is the right call — but only because the cash-flow problem is real.

Option B: just let it run

• 7 more months of $325/day ACH = $48,400 total outflow
• No new fees, no application risk
• Cash flow stays tight for 7 months

If the business can absorb the daily ACH, this is cheaper. If it can't, the refinance unlocks runway.

The four products that actually fund MCA payoffs

1. SBA 7(a) loan (cheapest, slowest)

• APR: Prime + 2.75–4.75% (currently 11–13.5%)
• Term: 5–10 years
• Time to close: 6–10 weeks
• Qualification: 680+ FICO, 2+ years in business, profitability, no recent defaults
• MCA-payoff caveat: SBA underwriters increasingly flag MCA debt as a credit-negative. Some lenders will require the MCA paid down to under 30% before they'll fund a refinance.

2. Online term loan (Funding Circle, Lendio, Bluevine)

• APR: 12–30%
• Term: 1–5 years
• Time to close: 1–2 weeks
• Qualification: 620+ FICO, 1+ year in business, $100K+ annual revenue
• MCA-payoff caveat: Most online term lenders will fund a payoff but want the wire to go directly to the MCA funder (not to the merchant's account). This eliminates the risk of the merchant taking the funds and not paying off the MCA.

3. Business line of credit (BlueVine, OnDeck)

• APR: 9–24%
• Term: Revolving
• Time to close: 1–3 business days
• Qualification: 625+ FICO, 1+ year, $120K+ revenue
• MCA-payoff caveat: The LOC limit needs to be large enough to cover the payoff in one draw. If your LOC is approved at $25K and you need $48K to pay off, this won't work.

4. MCA consolidation (Forward Financing, National Funding)

• Factor: 1.28–1.45 on the consolidated balance
• Term: 12–24 months
• Time to close: 2–5 business days
• Qualification: 550+ FICO, 6+ months, willingness to consolidate 2+ open MCAs
• MCA-payoff caveat: This is the dangerous one. You're often paying a factor on top of an already-paid factor. The math only works when you have 3+ small daily ACH withdrawals consuming cash flow, and the consolidation extends the term enough to drop the daily ACH substantially.

When refinancing is a trap

Three scenarios where refinancing actively hurts you:

• The new loan has prepayment penalties of its own. Some online term loans include 1–3% prepayment penalties for early payoff. If your goal is to refinance again into something cheaper later (e.g. SBA after 12 months of on-time payments), this locks you in.
• You're refinancing into a different MCA at a similar factor. Common with stacked-MCA consolidations. You're often paying a 1.35 factor to escape a 1.32 factor. The math fails almost always.
• You don't fix the underlying cash-flow problem. If you took the original MCA because revenue was structurally insufficient to cover operating costs, a refinance doesn't fix that. It just changes the shape of the debt. In 8 months, you'll be back where you started.

The "right reason to refinance" checklist

Refinance when ALL of these are true:

• The new product is at least 30% cheaper in APR-equivalent terms
• The new monthly payment is 40%+ lower than current daily-ACH monthly equivalent
• You have a clear plan for the cash-flow relief (paying down higher-cost debt, reinvesting in growth, building reserves)
• You've confirmed there's no early-closure fee on the existing MCA that wipes out the savings
• You're not adding new capital — pure refinance, not a "refinance plus $20K cash-out"

The cash-out trap

Many refinance offers come bundled with new capital — "we'll pay off your $40K MCA AND give you another $20K." The economics on this almost never favor the merchant. The new $60K loan accrues fees on the full $60K, not just the $20K you actually wanted. If you need new capital, take it separately. If you want a clean refinance, refuse the cash-out add-on.