Your current payoff timeline can be calculated by dividing what you still owe by the amount leaving your account each week. However, whether that timeline means anything depends on whether the business can survive between now and then.
This guide explains how to work out your MCA payoff timeline, what changes if you refinance or restructure, and why a longer timeline is often the better outcome.
Working Out Your Current Timeline
Follow these steps to work out your current MCA payoff timeline:
- Start with what you owe (not the amount you were advanced). An advance of $100,000 at a 1.4 factor rate means a total repayment of $140,000, so that’s the figure the timeline runs against.
- Next, add up what leaves your account each week. If you’re on daily payments, multiply the daily amount by five business days. If you’re carrying more than one advance, add them together, because the combined outgoing is what the business is absorbing in total.
- Divide the first number by the second to get your timeline in weeks. For example, a $140,000 balance against $6,000 a week clears in roughly 23 weeks.
That timeline is often shorter than people expect. The end looks close, but the pace required to reach it is what causes the damage.
What Changes If You Refinance?
Refinancing replaces the advances with a Bank Term Loan, which changes the timeline. Daily withdrawals stop and are replaced by a single monthly payment, set by the bank’s terms rather than by a factor rate, and the term is measured in years rather than weeks.
Where a business qualifies for refinancing, repayments typically fall by 65-85%. The timeline gets longer, sometimes considerably, but the weekly pressure on the account effectively disappears.
What Changes If You Restructure?
Restructuring keeps the existing agreements in place and renegotiates their terms. In practice, that usually means extending the repayment period and reducing the payment, with clients typically seeing repayments fall by 60-70%. In some cases, the total owed comes down as well, though that depends on what’s negotiated with each funder.
So the shape is similar to refinancing: a longer schedule, and a much smaller amount leaving the account.
A Longer Timeline Usually Helps
If both routes stretch the timeline, aren’t you simply in debt for longer?
Technically, yes. But the 23-week timeline above is only realistic if the business can absorb $6,000 leaving every week for five months. For a lot of businesses carrying stacked advances, it can’t, and the weekly withdrawal causes more damage than the balance does.
At $6,000 a week, there may be nothing left for payroll, suppliers, or taxes, and the usual response is another advance, which resets the whole problem at a higher amount. At $2,100 a week, there’s room to operate, and the debt still clears.
A Worked Example
A business carrying $140,000 in total MCA repayments, paying $1,200 a day across five business days:
| Now | After restructuring | |
|---|---|---|
| Leaving the account | $6,000 per week | About $2,100 per week |
| Schedule | Daily | Renegotiated terms |
| Payoff timeline | About 23 weeks | About 67 weeks |
| What it assumes | The business sustains $6,000 per week for five months | Terms renegotiated in the middle of the 60-70% range. |
The restructured route takes nearly three times as long on paper. It also leaves roughly $3,900 a week in the business, which is the difference between servicing the debt and being consumed by it.
Take the First Step
A self-calculated timeline tells you where you stand today. What it can’t tell you is which route is available to you, because that depends on your revenue, how many advances you’re carrying, and whether you’re still current on payments.
Our MCA Debt Relief Decision Guide walks you through those factors. You can also try our MCA Debt Calculator for an estimate based on your actual figures.
If you’re looking for free advice tailored to your situation, our friendly, family-run team is ready to help. Contact us for a free consultation with no judgment and no obligation to work with us.
FAQs
Usually, on paper. A Bank Term Loan runs for years, whereas an advance might clear in months. What changes is that payments become sustainable, and daily withdrawals stop. A short timeline you can’t sustain isn’t worth much.
Yes, and unlike an advance, it saves you money, because interest accrues over time rather than being fixed at the outset. Some loans carry prepayment penalties, so it’s always worth checking the individual terms.
With an advance, a drop in revenue doesn’t usually change what’s taken unless your agreement has a reconciliation clause, and those can be difficult to invoke. Restructured terms are negotiated based on what the business can realistically sustain, and a Term Loan is a fixed monthly amount you can plan around.
It reduces payments and, in some cases, the total balance as well, depending on what’s negotiated with each funder. The payment reduction is the consistent part.
Accurate enough to be useful, provided you work from the total owed rather than the amount advanced. It gets less reliable if you’re carrying several advances on different terms, or if payments have been missed and fees have accrued.
