Can I Get an MCA If I'm Behind on Rent?
Often, yes, and catching up on rent is a common reason owners take an advance. Funders want to know you're behind, by how much and whether the landlord is still working with you, so tell us up front rather than letting a landlord call surprise anyone.
Why does rent come up on an MCA application?
Rent is one of the few bills that can end your business if it goes unpaid, because a landlord can move to evict. Funders know this. When they learn a business is behind, they worry that the location itself is at risk. At the same time, a modest amount of back rent is a very solvable problem, and many funders are glad to fund a plan that fixes it.
What do funders want to see when rent is late?
- How many months behind you are and the total owed.
- Whether the landlord has sent a notice or filed anything.
- A letter or email from the landlord showing they'll accept a catch up payment.
- Deposits strong enough to carry both rent and the advance payment going forward.
Can the advance pay the landlord directly at funding?
The cleanest route is to have part of the advance paid straight to the landlord at funding. That shows the funder the problem is gone on day one. Some funders require it when the back rent is large. Afterward, keep proof that the account is current. If the funder checks with the landlord during underwriting, the answer then is simple.
When is an advance the wrong fix for back rent?
If the business is behind on rent because sales have dropped for good and the space no longer makes sense, an advance only delays a harder decision and adds a payment. Be honest with yourself about which situation you're in. A short stretch caused by a slow season or a late customer is fixable. A long decline usually needs a different plan, like renegotiating the lease or downsizing.
Do other overdue bills work the same way?
Rent isn't the only overdue bill funders ask about. Back payroll taxes, unpaid sales tax, vendor balances and utility shutoff notices all tell a funder something about the cash position of the business. The approach is the same for each: say what's owed and to whom, show the plan to catch up, and where it makes sense, pay the bill directly at funding. A clear plan makes a behind business look like a business fixing a problem, which is exactly what funders want to see.
Why should you keep your lease handy?
Funders sometimes ask for the lease itself, to see the monthly rent, the end date and any renewal option. A lease that ends soon without a renewal raises a question about the location, so have the renewal terms or the landlord's intent in writing if you can get it.
How can Afterfirst help with this?
Call 877-FUND-654 and tell us how far behind you are and what caused it. Send your statements and anything from your landlord. We'll tell you whether funders in our network will fund a catch up and, if they will, set it up so the landlord is paid directly.
What else do owners ask about this?
- Why would a funder call my landlord or visit my business?
- Can I use a merchant cash advance to pay a tax bill?
- Can I get a new MCA after defaulting on one?
More short answers on this topic are on the your business and your file FAQ, and the funder fit checker runs the numbers for your own file.
Have a question we didn't answer?
Ask us on the call. Call 877-FUND-654 with any question. We call you back, usually the same business day, and we always talk with you before we shop your file.