Hospitality business stuck with high MCA daily draw

My MCA daily draw is too high, what are my options?

Four live options. (1) Restructure with the existing MCA provider (term extension, draw percentage reduction, payment holiday). (2) Refinance the MCA into a term loan with a longer repayment period and lower monthly cost. (3) Refinance against owned kit or property with an asset-backed lender.

(4) Consolidate existing advances into one specialist facility, which only helps if no new MCA layer is added and usually costs more. The right route depends on cash position, card-take trend, and credit profile.

Can I refinance an MCA into a cheaper facility?

Yes, often. The MCA daily draw is structured around fast repayment (6 to 12 months) with the factor-rate premium baked in. Refinancing into an unsecured term loan (24 to 60 months) or asset-backed structure typically reduces monthly cost meaningfully even at a higher headline APR, because the term lengthens.

Lenders that may consider post-MCA refinance include Funding Circle (if credit is clean), iwoca (smaller tickets), Allica Bank or OakNorth (larger, secured deals; OakNorth's minimum loan is £1 million) and specialist post-decline lenders such as Bizcap or JPM Capital at higher pricing.

Will my card flow recover if I take a different facility?

Yes immediately if the new facility replaces the MCA outright. The MCA holdback (the agreed percentage of card receipts) stops once the MCA is repaid. For example, if the holdback is 10% and the business takes £100k a month on cards, that is £10k a month back in the business. The trade-off is the new monthly repayment on the refinance facility, which is usually less than the MCA holdback for the same total debt.

What if I have multiple MCAs stacked?

Stacking is common in hospitality: for example, an MCA taken in summer, a top-up in autumn and a bridge in spring. Each advance takes its own percentage of card takings, so the combined daily holdback can swallow a large share of them. A single longer-term facility that replaces several MCAs can lower the combined monthly cost. Specialist lenders such as Bizcap or JPM Capital, and asset-backed lenders, may consider this. Critical: stop adding new MCA layers while exploring consolidation.

My credit is damaged from the MCA period, can I still refinance?

Specialist post-decline lenders may consider hospitality files with damaged credit. They tend to focus on the current card-takings trend and cash-flow stability rather than past credit alone, but each has its own minimums (Bizcap, for example, asks for at least 4 months of trading and £12,000 monthly revenue, per its own site). Pricing reflects the risk.

What about asset finance against the restaurant fit-out or equipment?

Possible but limited. Hospitality fit-out generally depreciates fast and has low resale value, so asset finance against it, where available, advances a low share of its cost. Vehicles (delivery, courtesy, supply runs) and commercial kitchen equipment hold value better and refinance more cleanly. The Close Brothers Asset Finance, Aldermore, and Time Finance routes engage here.

Should I just close and start again?

Sometimes the right answer, but rarely the best one. A pre-pack administration or CVA process deals with the debt but is recorded against the company, can leave directors exposed under any personal guarantees, and can make borrowing harder for some time afterwards.

For most hospitality SMBs with a viable underlying business, refinancing or restructuring the MCA is materially better than insolvency. If the underlying business is no longer viable, talk to a licensed insolvency practitioner before any further borrowing.