How Long Does MCA Debt Settlement Take?

How long does MCA debt settlement take? For one MCA advance that is not in a stack, it can take weeks or a few months to sign. For several funders, it will take longer. The rate limiting step is often how fast the merchant can fund the offers. If you're looking for a specific number, no one has published a data set on this so you'll have to take each firm's word for it.

Firms that publish a number on their website can range from 30 to 60 days for a simple case with one funder to 24-48 months for a "program."

Why do MCA settlement timelines differ from other debt settlement?

MCA advances are short term. The NY Attorney General settled with MCA company Yellowstone Capital in January 2025 and described its practice of debiting a fixed amount per day over terms of between 60 and 90 days.

24-48 months may make sense for consumer debts (the FTC themselves point out that settlement "can take years to complete" as you save up in a dedicated account each month), MCA files move on a shorter clock. If you need to settle a vendor, equipment finance, or SBA loan, check out our guide to how long those types of settlements take.

How long does it take to settle one MCA vs. a stack?

For one MCA advance and a responsive funder, the process can be quick. However, the more positions in your stack, the longer it will take. If the stack is 40%, 50%, 60%, or more of your daily revenue, the dynamics change. Be mindful that anti-stacking clauses may cause all of the advances to go into default at once.

The time it takes to settle a stack will usually be a function of how long it takes to save up. Take your target number for settlement and divide it by how much you can set aside each month to see how many months you'll need to set aside funds. As an example, if you had a $200k stack and you thought you could settle it for 45% ($90k), and you could set aside the following per month:

Do some types of MCA funders take longer to settle?

• Original funder, in house: weeks.
• Original funder, referred to collection counsel: for just one MCA advance, usually longer than 60-120 days, as counsel will often rely on formal paper and the court calendar.
• Debt buyer: request proof of assignment under UCC 9-406(c).
• Syndicated advance: more approvals needed.
• Broker: they won't be able to settle your account.

Some funders have already taken advantage of their right after default to notify your customers to pay them directly (see UCC 9-607(a)(1)) and as such have access to cash that would normally go to your business. They are therefore often not as anxious to close the deal.

What legal deadlines speed up or slow down an MCA settlement?

Under New York law, once a lawsuit is filed, there are 20 days from the date of personal service or 30 days from the date of service by some other method for you to appear (see CPLR 320(a)). On the other hand, the MCA funder has only one year to seek a default judgment or their case is subject to dismissal (see CPLR 3215(c)). Once judgment is obtained, the MCA funder can file a restraining notice to freeze up to double the judgment amount in any account (see CPLR 5222(b)). Deals are often closed quickly at less favorable terms once a business owner realizes that their business does not have any operating cash.

Confessions of judgment can work both ways. First, the location where a confession of judgment can be filed has been limited to the county where the defendant resides since 2019 (see CPLR 3218(b)). This means that an MCA funder cannot file a confession of judgment in New York against a Pennsylvania business that does not have a place of business in New York. Second, when a confession of judgment is filed in Pennsylvania, you have 30 days after service of notice to file a petition to strike or open the judgment (see Pa.R.C.P. 2959). Also, beginning September 1, 2025, any confession of judgment provisions in a sales based financing contract with a Texas merchant shall be void (see Texas Finance Code Section 398.055).

When is an MCA settlement actually finished?

A MCA settlement is completed when the deal is documented, paid and you receive a letter confirming that your balance is zero, a release of any guaranty you signed, a return of any confession of judgment that was not already filed (in New York it can be filed for 3 years after it is signed), and a UCC-3 termination statement. The MCA funder has 20 days from the receipt of an authenticated demand to terminate their UCC lien (see UCC 9-513(c)). It is common for a MCA funder to file a UCC continuation statement while a deal is being negotiated as they are only permitted to file one in the six months before the UCC-1 financing statement lapses after 5 years (see UCC 9-515). To learn the steps involved in settling MCA debt in order, see our step-by-step guide.

The IRS considers canceled debt to be potentially reportable income even if you do not receive a 1099-C. See IRS Publication 4681.

Frequently Asked Questions

If the MCA funder is not contacting me, does that mean they are not interested in a settlement?

Not necessarily. The statute of limitations on contract claims is 6 years in New York. The file may just be sitting until someone makes a decision.

Do settlement talks pause an MCA lawsuit?

No. Negotiating with the MCA funder's attorney does not extend the time to respond to a lawsuit in New York unless they agree in writing.

Is it faster to negotiate a lump sum settlement or a payment plan?

Deals are closed faster when you pay the entire lump sum when the deal closes. However, payment plans can be just as fast to negotiate, it just takes longer to complete the deal as the file will not be closed until the last payment is received. So if you negotiate a 12 month payment plan, it will take 12 months from the closing date to receive the release of your guaranty and the UCC termination statement.

How long will it take the MCA funder to release their UCC lien after I make my last payment?

The MCA funder has 20 days to file or send a UCC termination statement after they receive an authenticated demand.