The first 48 hours: get your facts on one page
Compare any refinance in total dollars, and know that stopping payments can breach your contract and lead to a lawsuit or a judgment. Before you call anyone, make one list. Every option below works better when you know your exact position, and every person you talk to will ask for it.
- Each advance: funder's legal name, payback amount, amount paid so far, debit amount and schedule.
- Your last three months of deposits, and your slowest week.
- Whether each contract has a reconciliation clause, a personal guaranty, or a confession of judgment.
- Any other loans, liens or tax balances.
Fundera warns that owners who struggle to repay often try to refinance or add another advance, which only leads to further problems and a risk of default [5]. The list stops that reflex: it shows the real hole before you add to it.
Option 1: ask for reconciliation or a modification, in writing
If your contract has a reconciliation clause, use it first. It exists so that a fixed debit can be reset to your actual sales. NerdWallet also notes that owners at risk of default may be able to restructure the agreement or put payments on a temporary hold by contacting the MCA company directly [2].
- Find the clause and note the deadline, the proof it asks for, and where to send the request.
- Send a short written request: the contract number, your actual sales for the period, and the debit you are asking for.
- Attach full bank statements for the period, not screenshots.
- Ask for the funder's answer in writing by a date, and keep proof you sent it.
- Keep making debits while you wait, unless the funder agrees in writing to change them.
Regulators treat this right as real. In its 2023 settlement with Yellowstone Capital, New Jersey's Attorney General required the companies to give current customers enhanced rights to request changes to their payment terms based on actual receivables [3].
Option 2: refinance to a longer term, and know what it really costs
NerdWallet suggests refinancing an MCA with a traditional loan as another option [2]. It can work, but be clear on what it buys you. An MCA's payback is fixed, so the balance you owe does not grow with time. A loan charges interest on top. Refinancing usually lowers your payments a lot and raises your total cost, unless the funder gives you an early payoff discount.
| Path | Out of your account each month | Extra cost beyond the $24,000 |
|---|---|---|
| Keep paying the advance | About $6,300 (21 business days) | $0 |
| Loan at 30% APR, 24 months | $1,341.91 | $8,205.78 |
| Loan at 13.5% APR, 24 months | $1,146.65 | $3,519.56 |
If keeping the advance means missing payroll or rent, the lower payment can be worth the extra dollars. If you can carry the debit for a few more months, finishing it may cost less. Ask the funder for a payoff letter with any discount before deciding, and in states like Virginia the provider must give you an updated disclosure, including any prepayment discount or fee, when you pay off or refinance [8].
Qualifying can be the hard part. In the Federal Reserve's survey, 41% of firms denied financing in 2024 said it was because they already had too much debt [6]. Expect lenders to look closely at your existing advances.
Option 3: settlement companies, and the risks to weigh honestly
Some companies offer to negotiate your MCA balances down. Some owners do reach reduced payoffs. But this path carries real risks, and the pitch rarely leads with them.
Before you sign with a debt relief company
Stopping the debits or closing the account the funder debits can breach your contract and trigger default terms, a lawsuit, or a call on your personal guaranty.
If you signed a confession of judgment, a funder may be able to get a judgment quickly. In New York it can only be filed with the clerk of the county where the signer said they lived, or live at filing, and within three years of signing [9].
Get every fee in writing, and be wary of large fees due before any result.
No one can promise a specific reduction. Ask for the company's written plan for what happens if a funder sues.
If you have already settled with a funder that was later the subject of a regulator's action, check the regulator's page. New York's settlement with Yellowstone canceled 100% of the balances that merchants owed on Yellowstone MCAs, including balances on earlier settlements [4]. That relief covers only that company and its listed affiliates, but it shows why it pays to search your funder's name.
Option 4: legal help, including bankruptcy as a last step
A lawyer who handles commercial finance disputes can read your contract for defenses: whether the debit really tracks your sales, whether reconciliation was honored, and whether a confession of judgment was properly filed. If you are being sued, talk to one before you answer anything.
For a business with too much total debt to fix by agreement, chapter 11 has a streamlined path for small businesses called subchapter V. To use it, total secured and unsecured debts must be $3,424,000 or less, with at least half from business activities [7]. Bankruptcy has serious, lasting effects, so treat it as a decision for a bankruptcy lawyer, not a website. This is general information, not legal advice, as of Oct 20, 2026.
If you think a funder broke the law, you can also complain. New York's Attorney General says it takes complaints about MCAs [4], and New Jersey's Division of Consumer Affairs accepts complaints online [3].
Once you are through it: build the cushion that keeps it from happening again
Keep a simple weekly log while you work through any of these options: each debit, each call or email with a funder, and every promise made, with the date. If a dispute ends up in front of a lawyer, a regulator or a court, that log is often the most useful document you have.
When the last debit clears, get the UCC filing ended and keep the paperwork. Then build toward cheaper tools for the next gap: a line of credit you open while things are calm, and a cash reserve sized to your slowest month.
If you want to see whether a longer-term loan could replace an advance you are paying now, Batch Capital can check. The quiz starts with that need filled in.