The Short Answer: More Than One
For most businesses, one MCA is the maximum that can be sustained. Two doubles the daily payment burden. Three makes default almost certain. We routinely see businesses with four, five, or six stacked MCAs, and every single one is in crisis by the time they contact us.
The math: if one MCA takes 10 to 15 percent of daily revenue in ACH withdrawals, two take 20 to 30 percent, three take 30 to 45 percent. Add rent, payroll, inventory, and other costs, and there is simply not enough revenue left.
How Businesses End Up With Multiple MCAs
The pattern is consistent. The first MCA creates a cash flow squeeze. The business takes a second to cover the shortfall. Combined payments are even more aggressive, so a third is taken. Each subsequent MCA has a higher factor rate because the funder charges more for increased risk. Total cost escalates exponentially. Brokers facilitate this cycle because they earn commissions on every new advance.
Warning Signs You Have Too Many
- MCA payments consume more than 20 percent of gross daily revenue.
- You are using one MCA to make payments on another.
- You have missed payroll or vendor payments due to withdrawals.
- Your bank balance is near zero at end of each day.
- You are considering another MCA to solve problems caused by existing ones.
What to Do If You Are Stacked
Stop taking new MCAs immediately. Contact an attorney to evaluate all contracts simultaneously. Resolving stacked MCAs requires a coordinated approach addressing lien priority, negotiating with multiple funders, and potentially using competing claims as leverage. Individual negotiations without a global strategy often make things worse.