Hospitality business stuck with high MCA daily draw
MCA daily holdback can exceed 25% of card takings when stacked. For UK hospitality SMBs (restaurants, pubs, cafés, hotels) caught in this pattern, refinancing into a longer-term facility typically reduces monthly cost meaningfully and releases card-flow cash. Four routes are live: provider restructure, term-loan refinance, asset-backed refinance, and specialist consolidation. Critical first move: stop adding new MCA layers.
Route 1: Restructure with existing MCA provider
Open the conversation with your MCA provider before defaulting. Most UK MCA lenders (Capify, 365 Business Finance, Liberis, YouLend) will engage on restructure: term extension, daily holdback reduction, short payment holiday. The conversation is easier before the file is flagged as distressed.
- Open communication 30 days before stress, not 30 days after
- Document the underlying issue (seasonal trough, supplier price shock, staffing crisis), providers prefer concrete cause to vague difficulty
- Offer a structured restructure proposal in writing
Route 2: Term-loan refinance (clean credit)
If your credit profile is otherwise clean and the MCA was a one-off stress rather than systemic, refinancing into a 24-60 month term loan from a mainstream lender reduces monthly cost. The MCA is paid off as part of drawdown.
- Funding Circle, unsecured term loans up to £500k, 6-72 month terms
- iwoca, flexi-loan for smaller tickets, open-banking-led underwriting
- Allica Bank or OakNorth, asset-backed structures at scale (£150k+ tickets, property or equipment cover)
Route 3: Specialist post-decline consolidation
Multiple stacked MCAs, credit damage from the MCA period, or both, specialist post-decline lenders consolidate at higher pricing but reset the daily-draw structure.
- Bizcap, engages with stacked-MCA hospitality routinely
- JPM Capital, for files Bizcap has declined; deeper-tolerance specialist
- Capify or 365 Business Finance, sometimes consolidate their own stack with restructured terms
Route 4: Asset-backed refinance
If you own commercial property, vehicles, or significant kitchen equipment free of finance, asset refinance releases capital that can clear the MCA position. Pricing is materially better than unsecured refinance because the asset is the security.
- Close Brothers Asset Finance or Aldermore, vehicles, commercial kitchen, plant
- Time Finance or Bolton Finance, specialist asset and bridging
Per Adam's brief, commercial mortgage routes are out of scope for this page.
FAQs
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) Stack a second specialist MCA (sometimes called MCA consolidation, though pricing usually worsens). (4) Switch to invoice finance if you also take B2B card takings or invoiced sales. 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 engage with post-MCA refinance: Funding Circle (if credit clean), iwoca (smaller tickets), Allica Bank or OakNorth (asset-backed at scale), specialist post-decline (Bizcap, JPM Capital) at premium 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 (typically 10% to 20% of daily card receipts) disappears once the MCA is repaid. For a hospitality business with £100k monthly card takings, that releases £10k to £20k per month of cash flow back into 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, a £50k MCA in summer, a £30k top-up in autumn, a £25k bridge in spring. The combined daily holdback can exceed 25% of card takings. Specialist consolidation routes engage here: a single longer-term facility replaces multiple MCAs at lower combined monthly cost. Bizcap, JPM Capital, and asset-backed routes are the main panel. 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 take damaged-credit hospitality files routinely. The underwriting focus is current card-takings trend and seasonal cash-flow stability rather than historical credit perfection. A 30-day stable card-takings record + a credible commercial narrative about the underlying business gets engagement from Bizcap, JPM Capital, and the broader post-decline panel. Pricing reflects the risk; routing is real.
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 underwrites at low LTVs (40 to 60% of replacement 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 resolves the debt but creates a clean-credit issue (director affected for 6 to 12 months in most cases) and resets the trading record. 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.
To get matched to hospitality post-MCA refinance specialists: eligibility checker. Limited companies, LLPs and partnerships of 4+ only.