Can You Pay Off a Merchant Advance Early?

Yes—most of the time you can pay off a Merchant Cash Advance (MCA) ahead of schedule. But should you? That depends entirely on your contract. Many MCAs don’t offer significant savings for early payoff, so it’s important to read the fine print first.

How Early Payoff Typically Works

• Most MCAs allow it: Many providers let you pay early, but terms vary.
• Savings may be minimal: Some providers offer no discount at all, so you could still end up paying the full amount.
• Small discounts are common: If offered, expect 2% to 10% off the total owed.
• Timing matters: Paying early within the first few months can lead to more savings than waiting until later.

What to Check in Your Agreement

• Look for clauses labeled “early payoff,” “prepayment,” or “buyout.”
• Understand how any discount is calculated—flat or sliding scale based on remaining time.
• Check if advance notice is required (usually 5–10 days).
• Verify payment methods—some may require a wire or certified check.

When Paying Early Makes Sense

• Extra cash on hand: If your business has a surplus, paying early can improve your finances.
• Refinancing: A better loan offer could save you more overall.
• Improved cash flow: Free up your daily revenue for other needs.
• Future funding: Paying off existing debt can help you qualify for new financing.

When to Hold Off

• Low discount: If the savings are only 2–3%, it may not be worth it.
• Cash flow concerns: Don’t drain your reserves for a small gain.
• Seasonal business: Keep cash available for slow periods.
• Credit building: Paying on schedule helps establish positive credit history.

How to Decide

• Request a payoff quote: Get the current balance in writing.
• Compare your options: Would reinvesting that cash bring more value?
• Calculate savings: Divide the discount by months left to assess impact.

Steps to Pay It Off Early

1. Contact your provider for a written payoff quote.
2. Confirm the payment process and method.
3. Submit payment before the deadline.
4. Request written confirmation that your account is closed.

Alternative Strategies

• Increase daily payments: Pay off faster without a lump sum.
• Negotiate terms: If you’ve been reliable, ask for better rates.
• Refinance: Seek out lenders with better offers.
• Improve credit: Position your business for more affordable loans.

The Bottom Line

You can usually pay off a merchant advance early—but it’s not always the best move. Read your agreement, understand your potential savings, and weigh whether your cash could be better used growing your business instead.