You’ve been living with a fintech loan or merchant cash advance. Daily/weekly debits chew up cash. Sales are fine, not magical. You’re wondering, “Is there a smarter option—or am I just sponsoring a middleman’s lifestyle?”
Short answer: sometimes there’s a better path. But the math decides—not a broker’s pitch.
First, translate the jargon (no spin)
- Refinance: A new lender pays off your current balance in full and gives additional working capital. Net cash shows up, remittance stress should ease, and economics improve.
- Renewal: Your current lender gives you more money and resets the payback. Often the best move if you’re already with a top-tier fintech and your file is clean.
- Consolidation: Multiple positions are paid off and combined into one—not necessarily with any new cash out. Goal: lower daily/weekly/biweekly payments and stabilize cash flow. Rare with fintechs; possible with a conventional bank. (Current SBA rules generally do not allow refinancing MCA-style debt—confirm before you plan on it.)
Broker reality check: If a broker placed your deal, you paid the sell rate—their markup is baked in. Go direct to a same-tier competitor and target the buy rate. That’s where real savings come from.
Manage expectations: top-tier → top-tier ≠ miracle
If you’re with a legit top-tier fintech and you shop another top-tier, don’t expect the heavens to open. Risk models differ at the margins. You might shave cost or soften remittance a bit. Often your best leverage is with your current lender’s retention team: clean payment history + cleaner deposits = sharper renewal terms.
The four levers that actually decide your outcome
- Lender tier — Higher tier = tighter underwriting, better pricing; longer terms; lower tier = churn/stack theater.
- # of advances — 1 is best. Two is tough. >2 is essentially “no” for real refis. (Would a refi help? Yes, massively. Will anyone take that risk? Almost never.)
- Paid-down % — Around ~50%+ paid-in is where the math starts to work. Early in the term, your payoff is too big relative to what anyone will fund today.
- Business credit strength — Stable deposits, few/no NSFs or negative days, no fresh liens/judgments, clean UCC picture. Lenders fund patterns, not promises.
The refi math (simple, brutal, honest)
A refi works only if you can clear the old balance and still net meaningful cash—inside the new lender’s revenue-based cap.
- Max New Gross = the most the new lender will advance (based on recent revenue).
- Min Net % = the minimum you must take home after payoff (many require you to net a meaningful chunk).
Refi inequality:
Existing Payoff ≤ Max New Gross × (1 − Min Net %)
Example: You took $100,000 @ 1.30 → $130,000 total payback. ~50% paid-in ⇒ payoff ≈ $65,000. If Max New Gross ≈ $130,000 and you must net ≥50%, you need ≥$65,000 after payoff. Payoff ≈ $65k → the math can pencil (assuming underwriting likes your bank activity).
Why paid-down matters: Refis are sized to revenue and usually require you to net real cash. Early in the term, your payoff is simply too big.
Rules of Thumb (use these, skip the hype)
- Green: 1 position • ≥~50% paid-in • clean deposits → refi possible.
- Yellow: borderline paid-in or a few NSFs → wait 2–6 weeks, pay down, clean up bank activity.
- Red: 2+ positions or early in term → a refi would help cash flow, but approval odds are near zero. Collapse to one first.
Early-payoff “discounts”: unicorns with fine print
Incumbents may dangle renewal incentives. True early-payoff discounts when a competitor is retiring the balance? Rare. Lenders aren’t in the business of rewarding churn or making the other lender’s risk smaller/safer? Don’t build your plan on a fantasy discount.
Consolidation: real help, rare route
- Helps: Combining multiple positions into one with a longer term can slash the daily/weekly burden and stabilize cash flow.
- Who will do it: Fintechs seldom. Conventional banks sometimes—not the SBA for MCA debt under current rules. You’ll need clean financials, time, and patience.
If you’re not there yet
- Pay down and keep balances healthy; kill NSFs/negative days.
- Do not stack to “bridge” to a refi. That’s broker logic; it usually detonates cash flow.
- If you can truly wait and your file is strong, conventional bank money is the cheapest path (verify program rules first).
- Consider alternatives that fit the constraint (e.g., factoring if A/R is the bottleneck; revenue-based LOCs if you qualify).
Bottom line
Refinancing an MCA isn’t a vibe—it’s an inequality. When your numbers clear it (and your file looks adult), you’ve got options. Until then: simplify to one position, pay down, clean up banking, and stop subsidizing broker markups.