How to refinance a merchant cash advance: steps, costs and what to check
Refinancing a merchant cash advance means a new funder pays off what you owe and you repay the new funder on new terms. Done well, it gives you a smaller payment and more time. Done poorly, it adds a second fee and a new problem. Here is how to do it well.
What refinancing changes and what it doesn't
Most merchant cash advances have a fixed fee that is set when you sign. The remaining balance includes the unpaid part of that fee, so refinancing usually does not lower what you already owe. What it can change is the payment size, the payment frequency, and how long you have to repay.
Some agreements include an early payoff discount. If yours does, ask for the discounted payoff amount before you compare offers.
Ways to refinance
| Option | How it works | What to watch |
|---|---|---|
| Renewal with your current funder | Your funder offers a new advance and deducts what you still owe, so you receive the difference | You pay a new fee on the full new amount, including the part that pays off the old balance |
| Payoff by a new funder | A new funder pays off the remaining balance and you repay the new funder | Read your current agreement for limits on taking new financing |
| Consolidation | A new funder pays off several advances at once and you repay one balance | Compare total payback with what you owe across all of them |
| SBA or bank loan | A lower-cost loan pays off the advance, if you qualify | An active MCA is not eligible for SBA 7(a) refinancing |
The math, in one example
Say you owe $40,000 on an advance, including the unpaid fee, and it is taking $2,500 a week. A new funder offers to pay it off with funding of $40,000 at a 10% fee, repaid over six months. You would repay $44,000 at about $1,700 a week.
Your weekly payment drops by about $800. Over the next 16 weeks, when the old advance would have been paid off, you keep about $12,800 more for inventory and ads. Then you keep paying for about ten more weeks. The cost of that relief is the $4,000 fee. The trade is worth it if the cash you keep earns more than $4,000, for example by keeping you in stock through a busy season. These numbers are an illustration, not an offer.
Steps to refinance
Frequently asked questions
Can you refinance a merchant cash advance?
Yes. Your current funder can renew it, or a new funder can pay off the remaining balance and you repay the new funder on new terms. Read your agreement first for limits on new financing.
Does refinancing an MCA lower the total cost?
Usually not, because the fixed fee is already part of what you owe. Refinancing changes the payment size and timing. It lowers the total only if your agreement has an early payoff discount that is larger than the new fee.
What is an MCA renewal?
A renewal is a new advance from your current funder. The funder deducts what you still owe and sends you the difference, and you pay a fee on the full new amount.
Can an SBA loan refinance a merchant cash advance?
Not while it is active. Under SBA rules effective October 1, 2026, an MCA must be converted to a term loan and paid for at least 24 months, with no new advances, before it can be refinanced with a 7(a) loan.
Onramp Funds
Funding built around your sales
Connect your store and see what you qualify for. Repay as a percentage of sales, with no personal credit check.
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