Many options are available for businesses that want additional funding, and one of them is the merchant cash advance consolidation. This loan is offered to owners who have multiple existing credit forms and struggle to meet repayment terms.

What is Merchant Cash Advance Consolidation, and How Does it Work?

With MCA consolidation, you can break out of the cycle of loan stacking, which refers to taking out a loan to pay another. It allows you to roll up all your advance payments in a single schedule. Merchant cash advance consolidation loans also give you the chance to cut down your fees and interest.

If you are a business owner, chances are you have been on the receiving end of con games and unethical offers. Booster Financial strives to be different—we work to help you sustain your business and be trustworthy and honest in all our dealings.

Merchant cash advance vs. merchant cash advance consolidation

Before deciding whether MCA consolidation loans are suitable for you, it’s essential to differentiate them from merchant cash advances.

Merchant cash advance: what is it?

Not all businesses can get approval for Small Business Administration (SBA) loans or traditional bank loans. It could be that the merchant cannot meet the requirements yet, such as the minimum credit score and number of years in business. In this situation, a merchant cash advance may come in handy.

What’s crucial to understand is that an MCA is technically not a type of loan. Instead, it is a cash advance based on future sales. It also means that the requirements are likely different from traditional loans. Lenders may look more into your revenues than credit score or time in business.

At Booster Financial, businesses can avail themselves of an MCA if they can pass these requirements:

  • $110K or more annual revenue
  • Four months or more in business
  • 550 credit score or higher
  • Majority ownership of the company
  • Business bank account

When you get approved for an MCA, you will receive a lump-sum payment. The repayment is usually debited from your business account daily or weekly until the balance plus the factor rate and the fees are paid off.

While MCA is easier to qualify for than traditional or SBA loans, the fees and interest rates tend to be higher. It’s a relatively costly financing option among the other loan types. Why is this so? Borrowers who cannot secure a conventional loan are often viewed as high-risk to lenders. To mitigate that, the lending firm will charge the borrowing business more in exchange for the privilege of an accessible funding option.

Although it’s not always the case, a business may apply for one more cash advance and another if they need more funds. It can lead to loan stacking, and before you know it, you’re paying off different debts simultaneously. If you find yourself in this situation, an MCA consolidation might be the help you need.

Merchant cash advance consolidation: what is it?

If you struggle to manage several MCAs, you can consider an MCA consolidation as one of the most viable solutions. It’s the best answer to headache-inducing debts with different payment schedules and factor rates.

A merchant cash advance consolidation can restore your cash flow and ease your repayment terms into a single monthly payment. It also lessens the number of lenders from which you have an existing MCA.

An MCA consolidation is a long-term loan with a large enough sum to cover all your cash advances. It can help you manage your debts and stay afloat in the market.

How it works

Booster Financial’s MCA consolidation loan works by buying out every existing cash advance you have and lumping them into a lone cash advance. This sum typically has a better interest rate and terms to your advantage.

This loan product is a trade for your multiple loans. You can save a significant amount on your debt service payment and get a better factor rate. It gives you the best solution to numerous simultaneous advances that would otherwise become a disaster if left unattended.

Our lending agency managed to help several business owners overcome the burden of loan stacking. We have a dedicated team of experts who can help you create the best plan to repay your cash advances.

As a business, we understand that sustaining your cash flow is crucial, and that can only happen if your finances are in order. You don’t have to be trapped in a cycle that can push you further into debt.

How is MCA consolidation different from refinancing?

Existing debts can be paid off using two ways: refinancing and consolidation.

A refinance works as a one-for-one trade, which means you will take out a new loan to replace the existing one. This new loan may have a better interest rate, repayment terms, and a more extended schedule.

On the other hand, consolidation loans gather your multiple forms of debt and combine them into a single loan product. In this instance, you are rolling up your loans from different lenders into one loan.

Refinancing Consolidation
Replaces a single MCA with a new MCA or loan Combines multiple existing MCAs and turns it into a new MCA or loan; there is only a single rate and one repayment schedule to follow.
Has lesser interest rate and payment terms than the previous MCA Has lesser interest rate and payment terms than the last multiple MCAs

When should you consider MCA consolidation loans?

If you find yourself in a circumstance where your merchant cash advances have stacked up more than you can repay, a consolidation loan could be the answer. This solution allows you to simplify repayment since it automatically debits from your business account once a month typically. It frees you up from multiple payments at different times of the month.

However, it’s worth considering that consolidating debt may mean your interest over time is higher since it’s a long-term loan.

If you take this step to restore your cash flow, the long-term interest may not bother your business much.

An MCA consolidation loan may help you, but it may also not. If the cycle started with you taking out a bigger loan than you can afford, this solution might only buy you time. It would help if you still made drastic and effective changes to widen your profit margins and free up more of your cash flow.

Considering the need

When deciding to go for an MCA consolidation, you must first thoroughly inspect your financials. You need to run the numbers and evaluate whether a new loan can help you avoid the previous inconveniences.

The first few things you would have to review are:

  • The current interest rates you are paying
  • What you can qualify for with the new loan
  • Possible payment terms and the repayment period of the new loan

The intelligent way to determine if you need a new loan is to examine your options and weigh your options. If it does not seem to help in your case, or if you will be losing more money in the long run, then it might be better not to take out a new loan.

What are the qualifications?

With any loan, you would expect that good credit in both personal and business aspects is a must. However, MCA consolidation loans may not always ask for this requirement. Instead, the current financial position of your company might be the heaviest factor in the approval process.

Much like in your MCA, a new consolidation loan will have you present your bank statements. These documents will reveal if your income is adequate to justify the loan. Some lenders may ask you to submit twelve months’ worth of bank statements.

Your business bank statements will then be analyzed. The lender may check your average daily balances and review whether you have had a negative balance or not. Any derogatory marks or suspicious transactions will also be inspected.


Lenders can charge you with a higher originating fee, which could be anywhere from 5% to 15%. Some lending companies add in junk fees, which are agreed upon without question if you want to secure the loan.

Before you sign the closing document, you must read and inspect the fine print. There could be hidden fees that might cost you more than what you initially computed.

Repayment period

The long-term repayment period is a strong selling point of this type of loan. While MCAs only span about three to twelve months, MCA consolidation loans can range from 24 months to 120 months. The loan term relies heavily on the risk factor for your business. If the lender evaluates you as a high risk, the repayment period might be shorter.

Interest rates

Consolidation loans are long-term, so it may mean lower payments for you. However, interest rates for this type of loan are likely far above those banks offer. Your rates will vary mainly depending on your business’s future receivables.

There are consolidation loans with interest rates ranging from 39% to 159% per annum. If you secure it, but with an increased duration or high-interest rates, then you could be paying more in the long run.

Personal guarantees

To mitigate the risk for lenders, you might be required to put up a personal guarantee. This safety net allows the lending company to act if you default on your loan. You might have to give up your business assets and personal assets and accounts as well.

Some examples of personal guarantees you might have to present are real estate, cars, bank accounts, or other assets under your name.

Qualifications for Booster Financial’s MCA consolidation loans

Unlocking your cash flow could be possible with a consolidation loan. You can qualify for this product when you meet the requirements:

  • Three months or more in business
  • $110K or more annual revenue
  • 550+ or higher credit score

Our experts at Booster Financial will evaluate your application thoroughly and see if you qualify for loan consolidation. If you pass these requirements, along with other additional information that our team might find necessary, your business will be able to avail yourself of a merchant cash advance consolidation.

Where can you get this loan?

Thankfully, there are plenty of options if you determine that you need an MCA consolidation. Different lenders offer varying sizes and structures for such loans and other requirements. In general, lenders that offer better terms and rates require more due diligence throughout the loan approval process.

Asset-based consolidation loans

Asset-based lending agencies typically offer consolidation of at least two to nine MCAs in exchange for collateral. They may ask the business owner to put their personal property or commercial real estate as surety.

Lenders in this category may offer the first position and succeeding second or third position loans on the property if the need arises.

Qualifications vary from one lending firm to another, but you will be expected to have a business credit score of 550 or more and a 6-year run. You might also need to have a 0.5 debt service coverage ratio. Loans from asset-based lenders are usually placed with a tax lien.

Private investment banking

Small- to medium-sized businesses in several leveraged debts, including MCAs, can approach private investment banks to consolidate their loans. These financing institutions may offer lines-of-credit or term loans on a secured basis. Some private investment lenders may also provide loans without collateral.

Private investment banks generally evaluate a business’s cash flow and assets before consolidating debts. They may ask you for security, which could be accounts receivable, commercial real estate, inventory, or equipment and machinery.

Requirements depend on what the private investment bank stipulates. In some cases, you must be at least two years in business with a 0.5 debt service coverage ratio. Your business credit score may vary based on what asset you put up. Tax liens are not available for this option.

Cash advance consolidation companies

Merchant cash advance consolidation firms have the capacity to buy out every existing cash advance you have and roll them into a single MCA. This loan product can have a more manageable term and rate than your previous ones.

Lenders in this category may offer daily, weekly, or monthly repayments, although most will stick with daily remittances. These funders often require the owner to net at least half of the loan amount after all the MCAs are paid off. They may offer to pay the entire debt without providing any new funds.

The requirements may include some or all the following: credit application, bank statements from six months back, a list of existing cash advances, voided checks, and identification documents.

Additional position cash advance funding

Some businesses need to secure an immediate working capital but cannot qualify for traditional financing or even a consolidation loan due to a low credit score or tax lien. In this situation, some lenders offer additional cash advances in the second, third, fourth, or fifth positions.

Borrowers would typically pay the highest rate out of all the MCAs, which could go up to a factor rate of 1.50 for over five months.

If you avail yourself of this funding, you might be asked to present six months’ worth of bank statements and a credit application. The lender may also require a voided check and photo ID for verification.

What are the types of consolidation loans available?

There are several types of loans and cash advances that can be used for MCA consolidation. Every lender will have a unique approach to loan consolidation—some may pay it off directly by buying out your loan, while others will lend you a lump sum, granting you the responsibility of paying off the loans.

Merchant cash advances

If you have multiple MCAs, it could indicate that your business does not have a good credit score, which disqualifies you for many loan types. In this case, you might need to apply for an MCA with bad credit to help you consolidate your loans.

This solution may have a shorter repayment period from three months to a few years, meaning a higher repayment amount and interest rates. You must carefully weigh the pros and cons before saying yes to this loan because of these trade-offs.

MCAs can help with buyouts and reverse consolidations, but only if you qualify for a decent rate. You might find an offer at 18% to 60% buy rates with a term length of three to eighteen months. You can choose between flexible payments: daily, weekly, or monthly.

Online Lending

If your credit score is less than stellar, you can also consider approaching an online lender for a consolidation loan. You may have access to a merchant cash advance from these funders, a longer repayment term, and higher rates.

Online lenders tend to accept you with lower credit and a high-risk business profile. The lender will mitigate such risk by charging you an interest rate between 6% to 30%. It’s a great help for owners who cannot qualify for bank consolidation loans. These funders can deliver the money in quickly a few days, unlike the other options on the list.

If you need quick funding for any emergency or investment opportunity, this solution might fit you. The term length can be anywhere from one to five years, although you need to take on higher interest rates.

SBA loans

The 7(a) program is an SBA loan that owners can use for different expenses, although you must meet the stringent requirements to acquire it. SBA offers the lowest rates out of all the financing options out there. These loans can have repayment terms of up to 25 years.

In an SBA loan, the government itself guarantees a portion of the loan. The administration’s loan products are affordable and easy to qualify for. It helps lessen the risk a lender (either a direct funder or a bank) must take on, which can prompt them to grant you a loan.

SBA loans can offer term lengths of seven to 25 years and an interest rate that starts at about 6.75%. It typically requires monthly withdrawals from your business bank account.

Traditional bank loans

If your credit score has improved since your last MCA, you might already qualify for a traditional bank loan. It’s an ideal option if you want better terms and rates, with a long repayment period that can help you free up your cash flow.

Bank loans may have terms from five to twenty years with only around a 10% interest rate. It is typically repaid every month. The catch is your business must be performing well financially, boasting a solid revenue stream that can sustain your monthly obligations.


The lender may offer a buyout of your existing MCAs and replace them with a single loan. This new product is often offered at a lower interest rate and a long-term repayment period. However, the loan will be of the same amount or slightly higher.

Reverse consolidation

If you don’t want to pay off your debts early through a buyout, you can choose reverse consolidation. This type of loan helps you opt-out of refinancing and instead receive a sum to pay your monthly dues. The lender will then withdraw a separate amount lower than the deposit as payment for the reverse consolidation.

This cycle will continue until you pay off all your debts and the only remaining loan is the reverse consolidation. This method is ideal for your previous lenders who do not allow buyouts or payoffs. It can help you get out of a quicksand debt.

Reasons for consolidating your MCAs

Once you find yourself in many debts, you might find merchant cash advance consolidation as the best solution for your dilemma. Here are some of the benefits you can get from it.

Fewer monthly payments

When you have multiple cash advances, you must pay for your monthly obligations with different due dates. You might find it confusing to identify which cash advance was debited from the bank account, potentially disturbing your cash flow. You can avoid this problem if you avail yourself of loan consolidation.

Lower monthly payments

An MCA consolidation loan allows you to spread your repayment term for an extended period. Aside from that, you may also be given a lower interest rate. All these features might mean a lesser monthly payment that’s easier to track and manage for you.

Less damage to your credit score

It’s hard to keep track of several repayment schedules, which could cause you to put sufficient funds in your debited account. You might incur an overdraft charge for your payment lapses. You won’t have to worry about this issue when you choose an MCA consolidation and avoid ruining your credit report. Additionally, MCA companies usually don’t report credit bureaus like term loan funders and banks.

More flexible payments

You can coordinate with your lender to set a payment plan that suits your current needs and capacity. Unlike banks that rarely offer flexible terms, an MCA consolidation lender may offer monthly, bi-weekly, weekly, or daily repayment withdrawals.

Pros and Cons of MCA consolidation loans


You can benefit from an MCA consolidation in many ways. Firstly, you will have an easier time managing your business cash flow since it’s easier to budget for the repayment. You will only need to worry about one payment schedule. If your cash flow is unpredictable, you still stay on top of your obligation because you know how much and what date you need to repay your loan.

Secondly, MCA consolidation loans enable you to enjoy a blended interest rate, the combined rate from all the multiple MCAs consolidated. The combined rate is calculated based on the outstanding rates and balances, which are often surprisingly high if you compute the overall rate.

When you diligently meet your repayment dues on your MCA consolidation, it can positively impact your credit score. You can pay off your existing loans to qualify for loans with better terms and rates in the future.


Like other loan products, consolidation loans may have downsides to your borrowing decision.

Every lender will have a different set of qualifications, which you need to meet to avail yourself of the loan. If you cannot pass the requirements, then trying for one might be counterproductive and a timewaster.

It’s essential to check the lending requirements before applying. You need to know the minimum monthly revenues and credit score it would take to qualify for the loan. Otherwise, it would be better not to seek a consolidation loan if you fall short of the requirements.

Additionally, loan consolidation can start another round of debt for you. Since you are still rolling over your existing MCAs, you might have difficulty keeping up with the repayment, significantly if your cash flow cannot sustain it. When borrowing an MCA consolidation, make sure to have a clear repayment plan.

Lastly, the extended repayment terms and fees may cost you more in the long run than the combined rates on existing debts. Therefore, you must compare the interest rates and analyze whether you are saving money or getting more into debt.

Frequently asked questions

How long does an MCA consolidation loan take?

The time you spend applying for the loan until the closing process will take only a few days. At Booster Financial, you can receive the funding as fast as a day!

What if I have a stack of MCAs?

MCA consolidation loan products generally don’t limit how many existing MCAs the borrowing business has. If you can submit the requirements and qualify, you will be able to avail yourself of a consolidation loan with flexible terms and rates.

How much will it cost me?

Any financing option is typically cost-free upfront. However, you will be charged fees and interest rates throughout the application and approval processes. These expenses will usually be included in your repayments.

Fulfilling your consolidation loan repayments satisfactorily can help you become eligible for other loans with a more favorable term.

Can debt be a good thing?

In business, debt can usher growth, but only if you manage it well. It’s a way to develop a better credit score for your company. That, in turn, gives you access to other loan products with a lower interest rate.

How do I apply?

You can start by filling out the application form, which asks for some information from you. It will help our experts point you in the right direction—what type of loan and repayment plan will work in your favor.

You may also call our phone line directly to talk to a representative if you want a more in-depth understanding of our loan products.

You can get ready for application by preparing your documents beforehand. You need to secure proof of your monthly and annual revenues and your years in business. You also must submit papers about your credit score.

Some lenders will require more than these documents depending on what merchant cash advance consolidation will suit your current needs.

How do I make sure that I can secure the loan?

As the owner, you must maintain good financial standing for your business. Ensuring that your revenue streams and cash flow are in shape helps you become qualified for different loans. Even when you need immediate funding, lenders would want to know that you can meet the obligations of a consolidation loan in the long run.

When your business meets the minimum requirements and has a healthy status, you will have a better chance of securing that loan.

The Takeaway

If you feel suffocated because of multiple MCAs that are exhausting to deal with, help is always available at Booster Financial. MCA consolidation could be the best answer to your problems, allowing you to wipe off your existing debts. This loan rolls it all up into a single repayment plan, which gives you more freedom to focus on your core business aspects.

It’s essential to take control of your finances! Contact Booster Financial and discover the right loan product to help you maintain and grow your business today.

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