As of October 1, 2026, an active merchant cash advance generally cannot be refinanced with an SBA loan. Here is what the new SOP says and what owners can do instead.

If you took a merchant cash advance (MCA) and hoped an SBA 7(a) or 504 loan would pay it off, the rules that took effect on October 1, 2026 matter. The U.S. Small Business Administration issued SOP 50 10 8.1 in SBA Information Notice 5000-880695 (published August 14, 2026). That SOP applies to applications that receive an SBA loan number on or after October 1, 2026.

Trade publication deBanked (September 23, 2026, by deBanked Staff) summarized the new refinance language for sales-based repayment agreements, including MCAs. This guide restates those points for small business owners in plain English and links both sources so you can read them yourself.

What the new SOP says

According to deBanked's reporting on the SOP that takes effect October 1:

"Sales-Based Repayment Agreements (e.g.; Merchant Cash Advances) are only eligible for refinancing if the original agreement has been converted to a term loan, has amortized for at least 24 months, and no additional Agreements have been implemented since the conversion of the prior agreement(s)."

And:

"If the Sales-Based Repayment Agreement is still active, it is not eligible for refinancing."

Source: deBanked, September 23, 2026. Official SOP issuance notice: SBA Information Notice 5000-880695 (PDF).

deBanked notes this is slightly different from last year's SOP language, which said merchant cash advances and factoring agreements are not eligible for refinancing. The new wording adds a delayed, conditional path after conversion and a long amortization period.

What that means in plain English

For most owners making MCA payments today, the near-term answer is unchanged: an active MCA is not eligible for SBA refinance.

A limited path may open later only if all of these are true:

The original sales-based agreement has been converted to a conventional amortizing term loan.
That term loan has amortized for at least 24 months.
The business has not entered any new sales-based repayment agreements since that conversion.

If the sales-based agreement is still active, SBA refinance of that obligation is not available under the language quoted above.

Rules can be updated again. Confirm current requirements with an SBA lender before you plan around them.

Why the language changed (deBanked's reading)

deBanked's staff wrote that the new language was "perhaps put in place to close a potential loophole where an MCA is converted to a term loan and then immediately refinanced by an SBA." That is deBanked's reading of the change, not a separate statement of SBA intent beyond the notice itself. Read their article and the SBA PDF for the full context.

What owners can do instead

If an SBA payoff of your MCA is off the table for now, focus on cash flow and total cost—not a single product name.

1. Get a clear picture of what you owe. Ask your MCA funder for the remaining balance, the remaining term or estimated remittance schedule, and whether a discount is available for an early payoff with non-SBA funds.

2. Look at non-SBA refinance or consolidation options. Some private lenders and term loan programs can refinance or restructure expensive short-term debt when cash flow supports a fixed payment. Eligibility and pricing depend on revenue, time in business, and credit—not on an SBA loan number.

3. Compare working capital and MCA alternatives. If the business still needs operating capital after you stabilize the MCA, compare structures carefully. Daily or weekly remittances stack quickly when you layer new sales-based products on top of an existing one.

4. Avoid stacking another sales-based agreement if you hope to use the 24-month path later. Under the language deBanked reported, new sales-based agreements after a conversion can reset eligibility.

5. Talk through the file with a funding specialist. Pro Capital helps owners compare options across lenders. Our term loans and lines of credit start at Prime + 1 and require a 680+ FICO score; other products in our program are available across credit profiles. All of our funding products are unsecured. See today's prime rate on our rates page.

FAQ

Is an active MCA eligible for SBA refinance under the Oct 1 rules?

No, not while it remains an active sales-based repayment agreement. deBanked quotes the SOP: if the agreement is still active, it is not eligible for refinancing.

What if I already converted my MCA to a term loan?

Under the language reported by deBanked, conversion alone is not enough. The converted term loan must have amortized for at least 24 months, and you must not have taken additional sales-based agreements since the conversion. Ask an SBA lender how they apply those tests to your file.

Does factoring count the same way?

Last year's SOP called out merchant cash advances and factoring agreements as ineligible for refinancing. The new SOP language deBanked highlights focuses on sales-based repayment agreements (with MCAs as the example) and the conversion-plus-24-month path. Confirm with your lender how they treat factoring on your specific application.

Will checking options with Pro Capital hurt my credit?

Our application uses a soft credit pull to check options—not a hard pull. You can apply online or call (561) 444-7177.

How do I talk to Pro Capital about an MCA payoff?

Call (561) 444-7177 or apply. Bring your MCA balance, remittance schedule, monthly revenue, and time in business so we can compare realistic non-SBA paths if SBA refinance is not available.

Next step

If MCA payments are squeezing cash flow, do not wait on an SBA path that may be years away. Call (561) 444-7177 or apply at getprocapital.com/apply. Pro Capital will help you compare options that fit your revenue and credit profile.

This article is informational and not a commitment to lend or legal advice. SOP language is quoted from deBanked's September 23, 2026 article and linked to the SBA's Information Notice 5000-880695. Confirm current SBA requirements with an SBA lender. Rates and terms depend on the lender and your business profile.

How to Pay Off an MCA With an SBA Loan Under the New Rules (Oct 1, 2026)