Can you switch merchant cash advance providers?
By Helm, Funding Specialist
- You can switch MCA providers, but timing matters
- Most providers require your existing advance to be mostly repaid first
- Some new providers will settle your existing balance as part of the switch
- Switching can get you better terms if your business has grown
- Always compare total costs before making a move
If you have taken out a merchant cash advance and are not happy with your provider, whether because of poor service, high costs, or lack of transparency, you may be wondering whether you can switch to someone else.
The good news is that switching is possible, though the process depends on where you are in your current repayment.
When can you switch providers?
The best time to switch is after your current advance is fully repaid. At that point, you are free to approach any provider for your next advance without any complications.
However, you can also switch mid-advance. Many new providers will offer to settle your remaining balance with your current provider and then set up a new advance with fresh terms.
How the switching process works
Switching MCA providers typically follows these steps:
- Contact the new provider and share your card processing data
- The new provider assesses your eligibility and offers terms
- If you have an outstanding balance, the new provider may settle it directly
- Your card terminal is connected to the new provider for repayments
- The new advance is funded, minus any settlement amount
Reasons to switch providers
There are several valid reasons for switching your MCA provider.
- You have found a provider offering a lower factor rate
- Your current provider has poor customer service or slow response times
- You want more transparent terms and pricing
- Your business has grown and you qualify for better terms elsewhere
- Your current provider does not offer top-ups or renewals
Things to check before switching
Before committing to a new provider, make sure you:
- Calculate the total cost of settling your current advance plus the new one
- Compare the new factor rate with your original rate
- Check whether your current agreement has any early termination clauses
- Confirm the new repayment percentage is comfortable for your cash flow
- Read reviews and check the reputation of the new provider
Switching vs refinancing
Switching and refinancing are closely related but not identical.
| Feature | Switching Providers | Refinancing |
|---|---|---|
| Provider | Move to a new provider | May stay with current or switch |
| Existing balance | Settled by new provider | Rolled into new agreement |
| Terms | Entirely new agreement | New terms on combined amount |
| Reason | Better service or pricing | Better terms or more funding |
| Process | Full new application | May be simplified |
Frequently asked questions
Will my current provider try to stop me switching?
No. You have the right to switch providers. Your current provider cannot prevent you from taking out a new advance with someone else, though you will still need to fulfil your existing agreement.
Do I need to tell my current provider I am switching?
If the new provider is settling your balance, they will typically handle communication with your current provider. You do not usually need to initiate this yourself.
Will switching affect my credit score?
No. MCAs do not appear on your credit file, so switching between providers will not affect your credit score.
Can I switch if I have only just started repaying?
It is possible, but most new providers prefer that you have repaid at least 50 percent of your current advance. Switching very early may result in higher total costs.