Lowering MCA Payments: Pros and Cons

Lowering MCA Payments.    Is it a good idea, or not?  Why would you not lower your cash advance payments if it will help your cash flow?

There are significant advantages, and disadvantages to lowering your daily cash advance payments.    Disadvantages can include large extra fees, difficulty getting future business loans and being declared in default.

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Get the payments down

The lender has agreed to lowering  mca payments for you.  …….But should you do it?

Pros to Lowing MCA Payments: 

1. Immediate Cash Flow Relief: 

Lowered payments will give your business the immediate relief it needs from  daily advance payments.   How much it helps will depend on how many advances you have, how much the payments are lowered, and for how long.  Switching to fluctuating payments based on sales is another solution.

2. Saving Your Business

If you have stacked daily advance payments, first find out from all the advance companies if they will lower the payments, for how much and how long.  It may turn out that the savings are not enough.

Calculating this ahead of time will help you figure out if you should go forward or not.   Some advance companies may lower the payments and others will refuse.  The amount they will lower and for how long is different from one company to another, but the savings can be significant.


Acme inc has 2 daily cash advance payments.   Each payment is $200 per day.   $200 per business day times 21 business days per month = $4,200.      Two advances means $4,200 times 2 = $8,400.

Each cash advance company agrees to lower the payments in half,  to $100 per day for 21 days.   $100 per business day times 21 = $2,100 per month.   2 advances = $2,100 times 2 = $4,200.

The total savings is $8,400 – $4,200 =  $4,200 per month.  This is significant and your business may need to go this route if it makes the difference between staying in business or going out of business.

3. Avoiding Default

Lowering payments may prevent an outright default.  It will depend on what your contract says and discussions with each lender.    Many official defaults can be avoided by negotiating with the lenders and having a clear agreement that they will not designate and list your account as a default.   Check with the other owners when your business ownership percentage is less than 100%.

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Cons of lowering daily payments:

1. A Derogatory Listing with Business Lenders

Lowering cash advance payments will be considered a negative to funding companies.  Your account will be flagged.   Other lenders will see that your payments were lowered and may decline future requests.

2. It can still be a Default. 

Lowering cash advance payments almost always is a default per the original contract you signed.

It is very important to negotiate a non default  into your agreement when you lower payments.  Your account may be tagged and put into a database that still lists your business as a default account.   You may not even know this happened in spite coming to an agreement with the lender. 

3. Additional fees and other charges.

Lowering payments still means that your business did not meet the terms of the original agreement.    The advance company did not get payments they originally required.

They may impose a large additional fee as part of the agreement to lower payments.    This fee is often added to the end of the contract.    Your payments are temporarily lowered but the number of payments is extended.

This may still be better than missing payments and having an outright default, but factor this possibility into your decision.   The fees can often be significant, so ask about them when negotiating.

4. Trouble getting money later.  

Lowering cash advance payments will be considered a negative to other funding companies.  Your account will be flagged.   Other lenders will see that your payments were lowered and may decline any request.

This is basically a delinquency on your record and will make future borrowing harder.   Your business  will be declined more often.    This derogatory on your record may last for years.  As a result, your business may have additional problems getting financing.

FAQ on Lowering cash advance payments.

How can I lower my cash advance payments?

Call the merchant cash advance company and ask for your payments to be lowered.   You must provide a verifiable and critical business reason.   So make the request before you start missing payments.

Does it hurt me to lower payments?

Your account may be listed as having lowered payments in databases that can be seen by other lenders.  It can hurt future requests for business funding depending on the lender and type of financing. 

Does lowering payments mean I defaulted?

It depends on the lender, as well as the original contract  and your negotiations with them.  Read the contract first before contacting the lender.   Make sure they do not declare a default, otherwise your account may still be declared that way without you even being aware of it.


Lowering mca payments should only be done as one of the later stage options you choose to improve your cash flow. There are negative consequences that can be significant.

Once you choose this option, it needs to be handled  in a systematic way.  Decide which advances you need payments lowered on and make a plan to show the lender.  Explain why you need payments lowered, how much and for how long.

Prove to the lender that you will be able to resume regular payments and then keep making those regular payments.

If you have multiple advances, it is critical to take them all into consideration. Address them all at one time, rather than a scattered approach and your cash flow should be sustainable for the long term!


Declined For Missed MCA Payments? Get Money Now!

Has your business has been declined for missed mca payments?  You don’t need to settle for a denial anymore.   There are other creative options to get approved and funding, today!

Choose from a loan against equipment and even a large business loans that you can still get even with missed cash advance payments.  Apply below.

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How to get a business loan with missed MCA payments:

Steps and tips on how to get a business loan after missing mca payments.

Tools needed: internet connection, computer, phone.
Supplies needed:  Time available

Step 1 Evaluate your missed payments.

The number missed is important. Missing 1, 2 or 3 payments is considered minor and should not prevent your business from being approved for more unsecured type bank statement loan funding.

Missing more than 3 consecutive daily advance payments may trigger denials with other lenders.  Bringing your account current is the best first step to get new funding.

Communicate with the lender during the process.   Regardless of the outcome, it almost always causes the lender not to take more adverse action against you when behind.  It will also make new funding much easier.

Evaluate your missed payment status

Step 2  Match funding options

Tip: Begin a search for other funding options. Start the search broadly with other programs that your business may qualify for.  Decide which programs are the best fit for your business.

Look at the qualifying requirements for other programs.  Eliminate those programs that your business likely could not qualify for.   Prioritize and choose programs you can get approved for instead of programs you prefer.

Match the best programs that best fit to your business.

Step 3 Apply

Apply for the best matching program that allows for recent missed payments on other financing.  Talk to a representative before applying when possible.

Tip: Give them information on your overall profile and discuss your chances. If it is still a good fit, then apply.

Step 4 Close approval 

Review terms and conditions of any approval offer. Close the transaction if your business can handle the payments and the funding will assist in generating future revenue.

Step 5 Make a plan after denial. 

If the request remains a denial, then make a plan. Understand the decline reasons.  There may still be a chance to reverse the decision and get an approval.  Try this first.  Consider applying with other lenders when you cannot get approved.

Apply with other lenders.   If that still does not work, do not stop the process.
Begin working on correcting the reasons that were used for denial during the first funding request.   Whether it is credit, financials, or cash flow, try to improve this month over month until your profile meets the requirements of the previous lenders.

Make a short term plan if the denial remains in place.

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FAQ: How to get a business loan with missed mca payments:

Can I get a business loan with missed mca payments?

Yes, you can get a business loan with missed mca payments.   Review the decline reasons with the lender to see if the decline can be reversed.  Finally, you can work on correcting the denial reasons to get funding.

Can I get another cash advance after missing payments?

It is possible to get another approval.  An offer will depend in part on how many were not made, when they happened, and if they are still past due. Getting the account current is the most important step. Staying in frequent communication with the lender will help your chances as well.

Do missed cash advance payments show on my credit?

Untimely payments do not show up on your personal credit report if the lender has not declared a default.   Default accounts may show up on personal or business credit.  Check your contract.   It may provide information on how and when the lender reports delinquencies.


Being declined for missed mca payments is something that can be overcome.  Don’t wait several months to get funding.

Try to reverse the decline decision with any current lender.   Look for lenders that will approve your profile the way it is now.   Then work on correcting all your main decline reasons for the future.


Restarting Daily Payments: 3 Ways to Best Handle It

Is your cash advance company restarting your daily or weekly mca payments but you still cannot pay them?  Your business may need weeks, even months for sales to recover from the virus lockdown and make the payments.    Consider 3 ways to avoid defaulting, further below.

Restarting daily payments: How to make it work

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Complete the application above to:

    • Extend the terms by refinancing
    • Consolidate your advances
    • Payoff the advances
Is your mca cash advance company restarting your daily payments? Top 4 options if you cannot repay

1. Extend the terms and refinance the contract:

Tell your cash advance company that you need more time for your sales to recover.     Ask if they will refinance the existing mca contract and extend the terms.   Calculate the highest amount you can afford to pay daily and ask if they can extend the contact to match that amount.  Provide data and documentation to support your request. This can include recent bank statements and a current budget such as a profit & loss statement.  Include your specific calculations showing the maximum amount you can pay. Call the advance company,  and use your supporting documentation to make your case.

For example: Your regular daily payments of $100 per day for the remaining 50 days of the contract are being debited again.  The remaining payments still total  $5,000.   After looking at your current and estimated future cash flow, you calculate that you can afford $60 per day for that contract.   That equals about 83 more payments.   Ask if you can extend the term of that contract from 50 days to 83 days and confirm you can handle a $60 per day. If they will not, contact or apply with us above. We will help you get through this process.   The lender will also verify balances and what your business can afford. 

If you have more than one cash advance, then do the same calculations for the other contract(s).    First calculate the total of daily cash payments you can make.    Then figure out the maximum you can pay daily for each contract .

2. Consolidate your advances

You can consolidate multiple advances with one loan. This helps you because the new loan will be a longer term than the ones you have now.  Most have a term at least 50%, and up to 100% longer than the current positions.  A condition written into the contract does not allow your business to take any more new debt without permission.

Consolidators take this condition seriously. Taking new loans violates the terms and puts you in default. It is then up to the lender to enforce a payoff demand of your contract.

A variation is known as a reverse consolidation. This is easier to be approved for and could improve your cash flow by 25% to 50%.

3. Payoff the advances that have started debiting

Paying off the existing advances usually is the best way, but also the hardest way. A payoff happens by using a longer term asset based program to payoff existing positions. Borrowers that qualify for 24 months or more improve their monthly cash flow as much as 75% or more every month. They also get a weekly or monthly payment.

For Example: Your business has a cash advance originally for $50,000 that was paused. The current balance is $15,000 and the mca company is going to restart the payments that are $550 per day. You have to pay 27 more but still cannot make them. It will take your business at least another 2 to 3 months for sales to get close to normal.

With the current payments, you have about 5 weeks left in contract. If you can pay the contract off with a 24 months asset based loan, then your monthly obligation is $792 per month = $37 per business day.  $37 % $550 = 7%.  You have reduced and improved your debt by approximately 93%.!   Your monthly outflow on this debt went from $11,500 down to $792.  

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FAQ: Frequently asked Questions on restarting daily payments:

Can the cash advance company restart my daily payments even though I can prove my sales have not recovered?

They can restart your daily payments even if your sales need much longer to recover. Calculate what you can pay per day and propose a current and increasing payment to them as sales continue to increase. Provide them the documentation to support your numbers and proposal.

What can I do if the mca advance company won’t negotiate a payment I think I can handle?

Consider a consolidation of multiple advances or a refinance buyout of one of the positions. Another option is a payoff with an assed based longer term product which may be 12 to 24 months or longer and have a monthly payment.

What is the best way to get the mca advance company to work with me in taking the full payments out of my account again?

Tell them what is the most you can pay and give them reasons why. Give them data and documentation to back up what you say. This can include the most recent 3 months bank statements, a month to date statement, interim profit and loss, and balance sheet statements. Calculate and itemize your business income and expenses to prove your claim of the maximum daily payment you can make now.


How to Lower Daily MCA Merchant Cash Advance Payments

Do you need to lower daily mca merchant cash advance payments – immediately?

Is your account sometimes overdrawn because the mca companies keep debiting the daily payment?   Do you have multiple advances and do not know what to do if your daily mca payment is too high?  What can you do?

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Apply for one of several options below that do not involve settlements, closing your bank account, being declared in default, nor having a cash advance company file a coj certificate of judgement against you.   If your payments were temporarily lowered and the cash advance company is restarting the daily payments, consider term extensions or consolidations.

How to lower your daily mca merchant cash advance payments.

1:  Negotiate with the mca merchant cash companies to extend the term and lower the payments.  Offer to pay a lower amount for a longer amount of time or make changing daily payments based on a percentage of sales.

2:  Give the cash advance company solid reasons why you cannot pay the current daily advances.

3:  Get an alternative loan or consolidation loan to payoff the advances.

4:  Use the equity in assets such as a real estate loan or loan against equipment to payoff the advances.

Get lower daily payments now without adverse action against you or your business.

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FAQ, Frequently asked Questions on how to lower daily mca merchant cash advance payments

Can I get a monthly payment loan to pay these off?

Yes. One of the ways to lower your daily mca merchant cash advance payments is to get an alternative loan to pay off the mca cash advances. By doing so, you will be lowering the payment because your monthly payment on the loan to pay off the mca’s will be much lower than the monthly amount you were paying on the daily cash advances.
Usually, you will be paying 50% to 75% less if you are successful in securing a monthly loan to pay the mca’s off.

What if the cash advance companies do not want to lower the payments?

You may have to push hard to get a concession. If your business had a true hardship, such as a hurricane or another type of hardship, make that known. If that fails, read the mca merchant cash advance contract in detail.

Make sure you know exactly what can happen if you do not pay. It may be advisable to seek legal advice through an attorney if you know you cannot repay the advances.
If you know in advance your business will not be able to repay the advances, you can use the time in advance to:
– Determine what your options are
– Know what actions you can legally take

I cannot pay my advance. What can I do?

Check your state laws to find out if your state has special protections and laws. Some laws vary by state. Negotiate with the cash advance company either directly final options may include bankruptcy.

Should I get my Attorney to contact the mca merchant cash advance companies?

Whether you should get an Attorney involved in talking with the cash advance companies varies on a case by case basis. In some cases, having your Attorney contact and negotiate with the cash advance companies is a good idea. If you are offering to work with the merchant cash advance companies and they are not working with you, this may be a good situation in which your attorney contacts them.

Some mca merchant cash advance companies are more willing to work with customers than others. If you do not feel comfortable negotiating or discussing your past due debt with mca merchant advance companies, this may be another reason to involve an Attorney.