Business MCA Buyout Calculator

MCA Buyout Calculator – Consolidate Business Debt & Save Money

Breaking free from expensive merchant cash advances and high-interest business debt starts with understanding your consolidation options. Our MCA buyout calculator helps you see exactly how much you can save by consolidating multiple debts—including merchant cash advances, credit cards, and personal loans—into a single, lower-rate business loan. With many businesses paying 40-200% APR equivalent on MCAs, debt consolidation can reduce monthly payments by 30-60% while improving cash flow.

Using Benifyt’s debt consolidation calculator is straightforward: enter your current debts (credit card balances, personal loans, and MCA amounts), their interest rates or factor rates, and current monthly payments. Then input your consolidation loan terms—interest rate, loan period, and upfront costs. The calculator instantly shows your monthly payment reduction, total interest savings, and complete payoff timeline comparison.

Business owners trapped in the MCA debt cycle often struggle with daily or weekly automatic payments that consume significant revenue. Consolidating into a traditional term loan with fixed monthly payments provides payment predictability, lower overall costs, and improved financial stability. Our calculator helps you compare your current debt burden against consolidation options, showing real savings in dollars and cents. Whether you’re dealing with stacked MCAs, maxed-out business credit cards, or a combination of high-cost debts, this calculator reveals whether consolidation makes financial sense for your specific situation.

Understanding MCA Buyout Loans

What is an MCA Buyout? An MCA buyout loan pays off your existing merchant cash advances and replaces them with a traditional business loan featuring lower interest rates, fixed monthly payments, and more favorable terms. Instead of daily revenue-based payments with factor rates of 1.2-1.5 (equivalent to 40-200% APR), you get predictable monthly payments at 8-25% APR.

How MCA Buyouts Work: A lender evaluates your current MCA obligations, business financials, and credit profile to offer a consolidation loan large enough to pay off existing advances plus provide additional working capital if needed. The new loan typically has a 1-5 year term with fixed monthly payments, freeing you from the daily payment trap.

Qualification Requirements: MCA buyout lenders look beyond credit scores, focusing on your business revenue, bank statements (typically 3-6 months), time in business (usually 6+ months minimum), and cash flow stability. While you may still have MCAs active, lenders want to see that your business generates sufficient revenue to support the new loan payment.

Benefits of MCA Buyouts:

• Lower Rates: Reduce costs from 40-200% APR equivalent to 8-25% APR
• Predictable Payments: Fixed monthly payments vs. daily/weekly deductions
• Improved Cash Flow: Keep more revenue in your business
• Credit Building: Traditional loan payments improve business credit
• Longer Terms: 12-60 month terms vs. 3-18 month MCA terms

Types of Debts You Can Consolidate

Merchant Cash Advances are the primary target for consolidation due to their high costs. With factor rates converting to APRs often exceeding 100%, MCAs create a debt trap where businesses need to take additional advances just to cover existing ones. Our calculator shows the dramatic savings possible when replacing MCAs with traditional financing.

Business Credit Cards with high balances at 15-30% APR can significantly drain cash flow. Consolidating credit card debt into a lower-rate term loan reduces interest costs and provides a clear payoff timeline instead of revolving debt that never seems to decrease.

Personal Loans Used for Business often carry rates of 10-30% APR. While lower than MCAs, consolidating these with other business debts can still reduce your overall monthly obligations and simplify your financial management with a single payment.

Equipment Financing and Other Business Loans can also be included in consolidation if it makes financial sense. The calculator helps you determine whether including these debts in your consolidation reduces your total monthly payments and interest costs.

How to Calculate Your MCA Buyout Savings

Step 1: Gather Current Debt Information

• List all MCAs with balance owed, factor rate, and daily/weekly payment
• Include credit cards with balance, interest rate, and minimum payment
• Note personal loans with balance, interest rate, and monthly payment
• Calculate your total monthly debt obligation

Step 2: Convert Factor Rates to APR For accurate comparison, convert MCA factor rates to APR equivalents. A factor rate of 1.20 on a 6-month advance typically equals 80-120% APR depending on repayment frequency. Our calculator handles this conversion automatically.

Step 3: Input Consolidation Loan Terms Enter the interest rate you qualify for (typically 8-25% APR for buyout loans), desired loan term (12-60 months), origination fees, and any upfront costs. The calculator shows your new monthly payment and compares it to your current obligations.

Step 4: Review Savings Analysis The calculator displays monthly payment reduction, total interest savings over the loan term, time to debt freedom, and break-even point where consolidation costs are recouped through savings.

Debt Consolidation Strategies for Maximum Savings

Prioritize High-Cost Debt: Always consolidate MCAs and high-interest credit cards first, as these provide the most significant savings. Lower-rate equipment loans may not benefit from consolidation if their terms are already favorable.

Improve Terms Before Applying: Pay down credit cards slightly, correct credit report errors, and demonstrate 3-6 months of strong revenue to qualify for lower consolidation loan rates. Even a 2-3% rate difference significantly impacts total savings.

Consider Cash-Out Options: Some consolidation loans allow you to borrow slightly more than your debt payoff amount, providing working capital to prevent future MCA dependency. Our calculator can model this scenario by adjusting the loan amount.

Avoid New Debt During Consolidation: Once you consolidate, resist taking new MCAs or maxing credit cards again. Use the improved cash flow to build a cash reserve instead, breaking the debt cycle permanently.

FREQUENTLY ASKED QUESTIONS

How much can I save with an MCA buyout?

Savings from MCA buyouts typically range from $500 to $5,000+ monthly depending on your current MCA obligations and new loan terms. For example, consolidating $75,000 in MCAs with a 1.3 factor rate (approximately 90% APR) into a $75,000 loan at 15% APR over 36 months can reduce monthly payments from $3,125 to $2,595—saving $530 monthly or $19,080 total. Our calculator provides precise savings based on your specific situation, including all fees and interest costs.

Can I consolidate multiple MCAs at once?

Yes, you can consolidate multiple stacked MCAs into a single buyout loan. In fact, this is one of the most common uses of MCA buyout financing. Lenders will pay off all your existing cash advances simultaneously, eliminating the multiple daily debits and replacing them with one predictable monthly payment. This is particularly beneficial for businesses stuck in the “stacking” cycle where they’ve taken multiple MCAs to cover previous advances.

Will consolidating debt hurt my credit score?

Consolidating debt typically has a neutral to positive effect on credit scores. Initially, the credit inquiry and new account may cause a small, temporary decrease (5-10 points). However, within 3-6 months, your score often improves as you reduce credit utilization, establish consistent payment history, and decrease your debt-to-income ratio. The key is making all consolidation loan payments on time and not accumulating new debt.

What if I can’t qualify for a traditional consolidation loan?

If traditional lenders deny your consolidation loan application, consider these alternatives: SBA loans through the Community Advantage or Microloan programs offer better terms for businesses that traditional banks decline; Secured loans using equipment, inventory, or real estate as collateral improve approval odds and lower rates; Credit unions often have more flexible underwriting for members; Specialized MCA buyout lenders work specifically with businesses transitioning away from cash advances and may approve deals traditional lenders won’t.

How long does the MCA buyout process take?

MCA buyout loan approval and funding typically takes 5-15 business days, depending on the lender and your documentation readiness. Online lenders specializing in buyouts can approve applications in 1-3 days and fund within 5-7 days. Traditional banks may take 2-4 weeks. Once approved, the lender directly pays off your existing MCAs and other debts included in the consolidation. You’ll start making your new monthly payment within 30 days of funding.

NEXT STEPS: Get Your MCA Buyout Loan

Now that you’ve calculated your consolidation savings, take action to break free from expensive debt:

1. Download your calculation report showing payment reduction and total savings
2. Gather required documentation: 3-6 months bank statements, business tax returns, MCA contracts
3. Compare lender offers using your calculator results as a baseline
4. Apply for consolidation financing with confidence in your budget

Ready to escape the MCA debt trap?