MCA Payments Are Eating My Revenue — What Do I Actually Do?

If you’re reading this, you already know the answer to the question. The MCA is eating you alive. Your daily debit hits before payroll clears, before your vendors get paid, before you can even think about rent. You’re running the business to feed the funder, not the other way around.

Let’s talk about what’s actually happening, and what your real options are.

Short answer:

If MCA payments are eating your revenue, you have four real moves: renegotiate with the funder directly, consolidate through a reverse consolidation, settle the balance for less than what’s owed, or stop paying and prepare for the fallout. There’s no fifth option that lets you keep paying the current daily and magically have cash flow again. The math doesn’t work, and you already know it doesn’t work, which is why you’re searching this at 11pm.

Before you do anything, you need to understand why the payment is eating you, because the fix depends on the cause.

Why the daily debit is choking your cash flow

Most business owners, when they took the MCA, didn’t fully run the math on what the daily payment would do to their operating account. The funder did. Here’s what usually happens:

• You took a 1.49 factor rate on $100k, so you owe $149k, paid over roughly 6 months
• That’s around $1,150 a day, five days a week
• If your business does $80k/month in deposits, the MCA is eating roughly 30% of gross revenue before you pay a single bill
• Then you stacked a second position to cover the first. Now it’s 50%.
• Then a third. Now you’re underwater, and every deposit that hits the account is already spoken for.

This is the stacking death spiral, and it’s the single most common reason business owners end up Googling this at midnight.

Option 1: Renegotiate directly with the funder

This works less often than people think, but it’s the first call you should make.

Call the funder and ask for a reduction in the daily payment. Not a pause. Not a deferral. A reduction. Some funders will do this, especially if:

• You have one position (no stacking)
• You’ve been paying consistently
• You can show a real revenue dip with bank statements
• You’re calling before you default, not after

What the funder will typically offer: a 30-50% reduction in the daily for 2-4 weeks, with the missed amount tacked onto the back end. This buys time. It doesn’t fix the problem.

What the funder will not do: reduce the total balance, change the factor rate, or give you a real workout plan. That’s not their business model.

Option 2: Reverse consolidation

A reverse consolidation is when a third-party funder gives you a weekly deposit that you use to pay your existing MCAs, and you pay the consolidator back over a longer term at a lower effective rate.

On paper this sounds like the answer. In practice, read the fine print.

The good version: your $1,150/day becomes $1,500/week, you stretch the term from 6 months to 18 months, and you get breathing room. Cash flow returns. You can actually run the business again.

The bad version(and this is most of them): the reverse consolidator is just another MCA in disguise, the effective rate is worse than what you had, and when you default on them, you have four funders after you instead of three.

If you go this route, you need someone reading the contract who has seen dozens of these. Not your general business attorney. Someone who does MCA work specifically.

Option 3: Settle

This is what most business owners end up doing, and it’s what we do at Delancey Street.

Settlement means you stop paying the MCA, negotiate the balance down to a fraction of what’s owed (typically 40-60 cents on the dollar, sometimes less), and pay that settled amount over a schedule you can actually afford.

What you need to understand — settlement is not free. Here’s what actually happens:

• You stop the ACH debits (this is the default, and yes, it triggers everything we talked about in the other post)
• The funder accelerates the balance, sends demand letters, maybe sues
• A negotiator (us, or someone like us) goes to the funder with a settlement offer backed by a hardship narrative and bank statements
• The funder, who knows that a lawsuit takes 8-14 months and a judgment doesn’t guarantee collection, often takes the deal
• You pay the settled amount over 6-18 months at a payment you can actually afford

Settlement works because of a simple dynamic: the funder would rather get 50 cents on the dollar now than spend $15k in legal fees chasing a business that might go under before they collect. It’s not charity. It’s math.

Option 4: Stop paying, and don’t settle

Some business owners just stop. They close the account, open a new one somewhere else, and hope the funder doesn’t find them.

This doesn’t work, and here’s why:

• The funder has your SSN from the personal guarantee
• They file a UCC-1 against your receivables the day you funded
• They will sue, and you’ll get a default judgment if you don’t show up
• The judgment follows you, the PG, personally, for 20 years in most states
• Your credit is done, your ability to get any commercial financing is done, and if you ever try to open a merchant account anywhere, you’ll get flagged

Running doesn’t work. It just delays the inevitable, and makes the eventual settlement harder because now you look like a bad-faith actor instead of a business owner in hardship.

What you should actually do tonight

1. Pull your last 90 days of bank statements. Calculate what percentage of deposits is going to MCA payments. If it’s over 25%, you’re in the death spiral.
2. List every funder, every balance, every daily payment, every factor rate. Most business owners in this spot can’t even tell you this off the top of their head, which is part of the problem.
3. Don’t take another MCA to cover the current MCAs. I know it’s tempting. I know a broker is telling you it’ll work. It won’t. Every stack makes the eventual settlement or bankruptcy worse.
4. Call someone who does this work. Not a general attorney. Not your accountant. Someone who negotiates MCA settlements specifically, every day.

You are not the first business owner in this spot. You won’t be the last. The funders know exactly how this ends, because they’ve seen it a thousand times. The question is whether you get out with the business intact, or whether you let it run until there’s nothing left to save.

The worst thing you can do right now is nothing. The second worst thing is take another advance.