Can I refinance a Merchant Cash Advance into a longer‑term business loan?

Short subheading: How UK Business Loans connects you to lenders and brokers who may refinance MCAs into longer‑term, lower‑cost facilities.

Compliance: UK Business Loans is an introducer — we do not lend or give regulated financial advice. We match businesses to lenders and brokers. All finance offers are subject to lender terms and checks.

Free, no‑obligation quote — submitting an enquiry does not affect your credit score. Lenders may carry out checks if you proceed.

Quick summary

Yes — in many cases a Merchant Cash Advance (MCA) can be refinanced into a longer‑term business loan or consolidated into a different facility. Suitability depends on remaining MCA balance and collection method, your company turnover, cashflow and director credit profile, plus lender appetite. UK Business Loans can match companies (loans from around £10,000) with brokers and lenders who specialise in refinancing MCAs. Get a free eligibility check — Get Quote Now.

Hook / Intro

Merchant Cash Advances give rapid cash by selling future card receipts, but the trade‑off is often high effective cost and variable daily/weekly collections that squeeze cashflow. If your business has an MCA and you’re struggling with unpredictable collections or high factor rates, refinancing into a longer‑term, fixed‑repayment facility can reduce immediate cash outflows and bring predictability back to your finances. Below we explain when refinancing is possible, what lenders assess and how UK Business Loans helps you find the right broker or lender quickly.

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What is a Merchant Cash Advance (MCA)?

An MCA is a lump sum paid to a business in exchange for a fixed percentage of future card takings or daily/weekly collections until a pre‑agreed amount (the purchase price plus a fee, often expressed as a factor rate) is repaid. MCAs are not conventional loans — repayments are volume‑driven, not amortised monthly. That makes them fast and flexible, but often expensive and unpredictable for businesses whose card income varies.

That repayment structure is why many businesses look to refinance an MCA into a longer‑term business loan.

Why businesses refinance an MCA

• Lower effective cost: replacing a high factor rate with a lower APR loan can reduce total cost over the term.
• Predictable monthly payments: convert variable collections into fixed monthly repayments for budgeting.
• Longer repayment term: spreading the balance over 12–60 months eases monthly cashflow pressure.
• Consolidation: combine multiple MCAs into a single facility to simplify collections and admin.
• Improved cashflow forecasting and lender relationships for future borrowing.

Warning: refinancing can incur early settlement or breakage fees on the MCA and may require new security or personal guarantees — check all costs before switching.

Is it possible to refinance an MCA? What lenders look for

Short answer: often yes, but it depends. Lenders and brokers will assess a mix of the following factors:

Remaining balance & collection method

Lenders need to know how your MCA is collected (daily percentage of card takings, fixed weekly collections, or a bank debit). Some funders will only refinance MCAs collected via bank debits rather than direct card processor splits because bank collections are easier to replace.

Time in business and turnover

Typical lenders look for steady trading history and sufficient turnover to support new monthly repayments. Many refinance specialists prefer at least 12 months of trading and a clear pattern of card or bank receipts.

Profitability and cashflow

Underwriters review gross margin, bank inflows and recent trading trends. Strong, consistent takings make refinancing easier; seasonal or declining takings complicate it.

Credit history (company & directors)

Good credit helps, but specialist brokers can place cases with imperfect credit where there is strong cashflow or tangible security.

Security and guarantees

Some lenders require business or director guarantees or security over assets. Secured longer‑term loans often offer lower rates but require collateral.

Sector and lender appetite

Certain industries attract specialist lenders. Matching your sector to a lender who understands that market increases approval chances—this is where a targeted introducer helps.

Because criteria vary, working with a broker or panel that knows refinance markets improves outcomes. See our detailed guide to refinance loans on our refinance-loans page for more on options and specialist lenders.

Refinance options that replace an MCA

There are several routes to replace an MCA — each has pros and cons:

Quick comparison: MCA vs Longer‑term loan

Feature	Merchant Cash Advance	Longer‑term business loan
Repayment	Percentage of takings (daily/weekly)	Fixed monthly instalments
Term	Typically short (until factor repaid)	1–5 years (or longer)
Cost expression	Factor rate (not APR)	APR (transparent comparison)
Predictability	Variable	Predictable

• Longer‑term unsecured business loan — Pros: predictable payments, usually lower effective cost; Cons: may need stronger credit profile.
• Secured business loan / mortgage refinance — Pros: lower rates; Cons: security over property or assets.
• Asset finance — If MCA funded equipment, asset finance can replace the cost and tie repayments to the asset.
• Invoice finance — For businesses with strong receivables, invoice discounting or factoring can provide working capital and replace MCA collections.
• Debt consolidation loans — Combine multiple obligations including MCAs into one facility.
• Broker‑arranged refinancing package — Brokers can package deals across lenders when standard channels won’t fit.

See which option suits you — Get Quote Now

Costs, risks and things to check before refinancing

• Early repayment / settlement fees on the MCA — request a settlement statement from your MCA provider to understand breakage costs.
• Arrangement and legal fees for the new facility.
• APR vs factor rate — compare effective cost over the remaining life of the MCA, not just headline interest.
• Security and personal guarantees — these can change personal exposure.
• Cashflow impact during transition — collections or direct debits may change timing.
• Read all terms — ask for a side‑by‑side total cost comparison before committing.

Note: We do not provide regulated financial advice. Speak to the lender or a regulated adviser for detailed regulated guidance.

How UK Business Loans helps

We act as your introducer and match your company to lenders and brokers experienced in refinance cases. Our simple process:

1. Complete our short enquiry form (under 2 minutes) — basic business and MCA details.
2. We match you to lenders/brokers in our panel who have the appetite for refinancing MCAs.
3. Matched partners contact you with eligibility feedback and indicative quotes.
4. Compare offers and proceed directly with the lender you choose — we don’t process funds or give regulated advice.

We typically handle enquiries for loan values from around £10,000 upwards. Free Eligibility Check — Get Started

Eligibility checklist — what you’ll need

Before submitting an enquiry, have the following to hand:

• Company name and trading start date
• Annual turnover (last 12 months) and monthly bank takings
• Details of your current MCA: provider, original amount, remaining balance, collection method
• Recent management accounts or annual accounts (if available)
• 3–6 months of business bank statements
• Director names and basic ID/contact details

We share only limited information with matched partners to obtain initial quotes.

Typical timeline & what to expect

• Initial enquiry & match: hours to 24 hours
• Preliminary quotes from brokers/lenders: 24–72 hours
• Formal application and document submission: 3–14 days
• Final offer and settlement / funds release: 1–4 weeks (varies by lender and complexity)

Ready to start? Get Quote Now

Example (worked example)

Hypothetical: a cafe with a £50,000 MCA is paying a high factor rate with daily collections that vary seasonally. After sharing turnover and bank statements via our enquiry, a matched broker arranged a 36‑month unsecured loan to settle the MCA. The cafe moved from highly variable daily collections to a fixed monthly repayment, smoothing cashflow and freeing staff from daily reconciliation. (This example is illustrative — outcomes vary.)

Get a free eligibility check

How to choose the right lender or broker

When comparing offers ask for a full breakdown: total cost (include settlement fees), APR, repayment schedule, security required, early settlement terms and whether collections will change. Request a side‑by‑side comparison and references where possible. Choose the offer that balances cost, predictability and business continuity.

FAQs

Will refinancing affect my credit score?

Completing our enquiry does not affect your credit score. A lender may perform credit checks if you formally apply.

Do all lenders refinance MCAs?

No. Some lenders will not refinance certain collection types or high factor rate deals; specialist brokers may place more complex cases.

Can I refinance with poor credit?

Some specialist lenders and brokers consider cases with imperfect credit where cashflow and security are strong. It’s case‑by‑case.

How much can I borrow to refinance?

Amounts vary, but our partners typically handle deals from around £10,000 upwards.

Is refinancing always cheaper than keeping the MCA?

Often refinancing lowers monthly pressure and total cost, but you must factor in settlement fees and new arrangement costs — always compare total costs.

Will I need to give personal guarantees?

Sometimes — depending on lender, company structure and size of facility. Check terms carefully before accepting an offer.

Final call to action & reassurance

If you’re repaying a Merchant Cash Advance and want longer‑term certainty, get a free, no‑obligation eligibility check. Complete our short form and we’ll match your business to lenders and brokers most likely to help. You’re under no obligation to accept any offer. Free Eligibility Check — Get Quote Now

• No cost to use our service
• We only share your info with selected partners who can help
• We earn revenue when a business completes an enquiry

Legal & compliance

UK Business Loans is an introducer — we do not lend or give regulated financial advice. All finance offers are made by lenders and brokers and are subject to their terms and credit checks. For impartial borrowing guidance see the FCA consumer pages at https://www.fca.org.uk/consumers and MoneyHelper at https://www.moneyhelper.org.uk.

Related pages: Business Loans UK | Cashflow Loans | Invoice Finance | About Us | Contact

1. Can I refinance a Merchant Cash Advance (MCA) into a longer‑term business loan?
Yes — in many cases you can refinance an MCA into a longer‑term loan depending on remaining balance, collection method, turnover, cashflow and director credit, and UK Business Loans can match you to brokers and lenders who specialise in MCA refinancing.

2. Will submitting an enquiry with UK Business Loans affect my credit score?
No — completing our short, free enquiry is a soft process that does not affect your credit score, though individual lenders may perform checks if you proceed with a formal application.

3. How much can I borrow to refinance debt or for other business purposes?
Our partner lenders and brokers typically handle loans from around £10,000 up to multi‑million facilities depending on your needs and lender appetite.

4. What documents will I need to apply for a business loan or refinance an MCA?
Commonly requested documents include company details, 3–6 months of business bank statements, recent management or annual accounts, details of the existing MCA and basic director ID/contact information.

5. Can I get a business loan if I have poor credit?
Possibly — some specialist lenders and brokers consider applicants with imperfect credit where strong cashflow, security or trading history support the case.

6. How long does the refinancing or business loan process usually take?
Typical timelines are an initial match in hours, indicative quotes in 24–72 hours, document submission and underwriting in 3–14 days, and final offer and settlement in 1–4 weeks depending on complexity.

7. Are the lenders and brokers UK Business Loans connects me to FCA‑regulated?
Yes — we work with trusted UK brokers and lenders who operate under FCA guidance and are required to treat customers fairly.

8. Will refinancing an MCA always save me money?
Not always — refinancing can lower monthly pressure and total cost but you must compare APR versus factor rate and include MCA settlement, arrangement and legal fees before deciding.

9. Will I need to provide personal guarantees or security to refinance an MCA?
Some lenders require personal guarantees or asset security for lower rates or larger facilities, while unsecured options may be available based on your profile and lender terms.

10. How does UK Business Loans match my business with the right lender or broker?
We use the information from your quick, no‑obligation enquiry (sector, turnover, MCA details and funding needs) to introduce you to selected lenders and brokers in our panel who have the appetite and expertise for your case.