How to Refinance an MCA Into a Bank Loan in 2026

TL;DR You refinance a merchant cash advance by replacing it with a fixed-rate bank term loan or line of credit that pays off the advance in one lump sum and gives you a single monthly payment. One thing changed in 2026: you cannot use an SBA loan to do it anymore. The SBA banned MCA refinancing as of June 1, 2025. The bank path still works, and it still cuts your payment hard.

• A $100,000 MCA at a 1.4 factor rate means you owe $140,000, often repaid in about six months at roughly $1,100 a day.

• A $100,000 bank term loan at around 11% over four years costs about $2,585 a month.

• That swap frees up roughly $21,000 a month in cash flow.

• SBA 7(a) and 504 loans can no longer refinance MCA debt. The working refinance is a conventional bank term loan or line of credit.

If you took a merchant cash advance and the daily debits are now eating your business alive, you are not stuck. You can refinance it. The mechanics are simple: a bank lends you enough to pay off the advance in full, the daily payments stop, and you replace them with one fixed monthly payment at a fraction of the cost. Here is exactly how that works in 2026, including the rule change most operators have not heard about yet.

What "refinancing an MCA" actually means

Refinancing an MCA means borrowing money at a normal interest rate to pay off money you borrowed at an insane one.

An MCA is not a loan. It is the sale of your future revenue at a discount. You take $100,000 today and agree to pay back $140,000, and the lender pulls it out of your account every business day until it is gone. There is no interest rate on the paper, just a factor rate, usually between 1.2 and 1.5. Translate it to an annual cost and you are often looking at an effective APR of 40% to over 350%.

When you refinance, a bank gives you a single loan large enough to clear the remaining MCA balance. The MCA company gets paid off and walks away. You are left owing the bank instead, but on completely different terms: a real interest rate, a monthly payment instead of a daily one, and a payoff schedule measured in years instead of weeks.

The 2026 rule change: SBA is off the table

This is the part that trips people up. For years, the standard advice was to refinance an MCA with an SBA 7(a) loan. That advice is now wrong.

As of June 1, 2025, under the SBA's updated rulebook, SOP 50 10 8, you cannot use SBA loan proceeds to refinance a merchant cash advance. The SBA explicitly made MCA and factoring debt ineligible for refinancing with 7(a) or 504 loans. It does not matter how good your business looks. If the debt you want to clear is an MCA, the SBA will not touch it.

Worse, an active MCA can block an SBA loan you want for any other purpose, because those daily debits crush your debt service coverage ratio. Lenders count them against you.

So forget the SBA path for MCA refinancing. It is closed. The good news is the path that still works does not need the SBA at all.

How to actually do it: the conventional bank route

You do not need the government to refinance an MCA. You need a bank willing to write a normal term loan, and you need to look like a business that can carry one.

The working refinance in 2026 is a conventional bank term loan or a business line of credit. Here is the sequence.

First, total up your real payoff. Call the MCA company and ask for the exact remaining balance, not the original amount. If you have stacked two or three advances, add them all up. That number is what you need to borrow.

Second, stop stacking immediately. Every new advance you take makes you less fundable. Banks look at how many daily debits hit your account. The moment you stop adding to the pile, your file starts healing.

Third, get three to six months of clean bank statements. A bank underwrites your deposits and your cash flow. They want to see real revenue coming in and a business that, once the MCA drain is gone, can comfortably cover a monthly payment.

Fourth, match to a lender that funds this. Not every bank will refinance MCA debt, because they know the borrower is usually stressed. The lenders who do it look at your gross revenue, your time in business, and your debits-to-deposits ratio. This is where a match service earns its keep, by sending your file to the banks that actually say yes instead of the ones that auto-decline.

The math: why it is worth the effort

Run the numbers and the case makes itself.

Say you took $100,000 at a 1.4 factor rate. You owe $140,000, repaid over about six months. That is roughly $1,100 every business day, around $24,000 a month pulled straight out of your account whether you had a good week or a dead one.

Now refinance the remaining balance into a $100,000 bank term loan at around 11% over four years. The payment is about $2,585 a month. Same debt, paid off in an orderly way, at a payment your business can actually plan around.

That is the difference between roughly $24,000 a month and roughly $2,585 a month. You free up about $21,000 a month in cash flow, money that goes back into payroll, inventory, and growth instead of into a daily debit.

The term loan costs you more total interest only if you stretch it for years and ignore it. Even then, the cash-flow relief is usually what saves the business. An MCA does not kill you with total cost. It kills you with speed.

A bank term loan versus a line of credit

Two tools refinance an MCA, and they fit different situations.

A bank term loan gives you a fixed lump sum and a fixed monthly payment. Use it when you know the exact payoff number and you want a clear, scheduled path to zero. It is the cleanest way to kill a single large advance.

A business line of credit gives you a credit limit you draw against and pay interest only on what you use. Use it when your cash flow is lumpy and you want flexibility, or when you expect to need working capital again after the MCA is gone. It is less of a clean payoff and more of a permanent tool.

For most operators clearing one big MCA, a term loan is the move. If the underlying problem was a cash-flow gap that the MCA was papering over, a line of credit may serve you better long term.

What to do next

If daily debits are draining your account, the worst move is to take another advance to cover them. That is how a $100,000 problem becomes a $300,000 one.

The right move is to find out, today, whether a bank will refinance what you owe. That comes down to your revenue and your bank statements, not the SBA, and not the MCA company that has every reason to keep you on the hook.

This is the exact problem we solve. Tell us what you owe and on what terms, and we match your file across a panel of more than 40 banks to the lenders who refinance MCA debt at real rates, at no cost to you. The lender pays us when your deal funds. You stop the daily bleed and get back to running your business. If you are carrying an advance you regret, find out what you qualify for before you take the next one.