Can I Have a Line of Credit and an MCA at the Same Time?
Yes, many businesses carry both, but each funder sees the other's payments in your statements. Some MCA contracts restrict additional financing and some lines prohibit new advances, so check both agreements before adding the second one.
Why do owners combine a line and an advance?
An advance can fund a specific need quickly, while a line covers ongoing swings. Together, they give a business both a lump sum and a safety net.
What does each funder think?
The line provider sees the advance's daily or weekly debit and factors it into your capacity. The advance funder sees the line's payments and draws. Both want the combined payments to fit your cash flow.
Which contract terms restrict combining them?
- Anti-stacking clauses in advances can limit new financing.
- Lines sometimes treat new advances as a reason to review or reduce the line.
- UCC filings from each provider overlap on receivables.
Does the order you get them in matter?
If you already have a line and add an advance, tell the line provider. If you have an advance and want a line, disclose the advance. Hidden financing is a common trigger for defaults and line reductions.
How do you keep the combined payment in view?
Add the payments together and compare them with what's left in your account on your leanest days. If the combination leaves no cushion, one of them is too much.
Can you use the line to pay down the advance?
Some owners draw on a line to pay down an advance early. That can save money if the line's cost is lower and the advance offers an early payoff discount.
What does a plan for both look like?
Know which obligation ends first and plan the cash that frees up.
Which one should you open first?
If you know you'll want both, getting the line first is often easier. Line providers look at your cash flow without an advance payment in the way, and once the line is open, a small advance for a specific purpose can be added with the line provider's knowledge. Doing it the other way around works too, but the advance's daily payment reduces the line you qualify for.
Why does disclosure keep both relationships healthy?
Tell each provider about the other before you sign. A provider that discovers undisclosed financing in your statements tends to react sharply, by reducing a line or treating the discovery as a breach. An open conversation up front avoids that.
How do you plan the exit?
Know when the advance ends and what happens to that cash afterward. Many owners use the freed up cash to pay down the line, leaving them with an open, unused safety net.
How can Afterfirst help with this?
Call 877-FUND-654 with what you're carrying now. We'll tell you whether adding a line or an advance makes sense and what each agreement allows.
What else do owners ask about this?
- How much can I draw on a business line of credit?
- Can I make extra payments on my merchant cash advance?
- Can I get a merchant cash advance funded on a weekend?
More short answers on this topic are on the revenue-based financing and lines of credit FAQ, and the factor rate calculator 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.