Merchant cash advances (MCAs) promise fast cash. But for many small business owners, that fast cash turns into a debt spiral. Court records show a clear pattern: businesses take one MCA, then another, then several more, just to keep up with payments on the ones before it. This is called “MCA stacking.” It often ends in bankruptcy court, and sometimes it ends the business entirely.
Below are real, documented cases of businesses hit hard by MCA debt. If you’re carrying more than one MCA right now, their stories may sound familiar.
The Numbers Behind the Crisis
The MCA industry has grown fast. Market research firm Allied Market Research estimates the industry reached $19.65 billion in 2025 and could grow to $26.87 billion by 2030. That growth has come with a cost. Bankruptcy cases involving MCA debt surged starting in 2023 and peaked in 2025 (with no complete data for this year yet) with more than 230 filings, according to Bloomberg Law data. More than half of the country’s federal bankruptcy districts handled MCA-related cases that year.
Bankruptcy attorneys say the pattern is now common. One Tampa bankruptcy attorney said he can’t remember a recent case with fewer than four or five MCA creditors involved.
MCAs are not structured like normal loans. They don’t list a stated interest rate. Instead, they take a daily or weekly cut of sales. That fixed, repeat withdrawal is what breaks many businesses. When cash flow dips even slightly, owners can’t cover payroll, rent, and MCA payments at once. So they take out another MCA to cover the gap. This is how stacking starts.
Real Businesses Hit Hard by MCA Debt
- Rogers Landworks LLC. This Florida land-clearing and trucking company took out 21 separate MCA deals totaling more than $3.6 million. The company told the court its bankruptcy was directly tied to accumulated MCA debt and aggressive collection activity from its funders. It filed Chapter 11 in December 2025.
- Pat McGrath Labs. Even well-known, billion-dollar-valued brands aren’t immune. Founded by celebrity makeup artist Dame Pat McGrath, the cosmetics company filed for Chapter 11 in the Southern District of Florida on January 22, 2026, listing more than $50 million in liabilities. According to Bloomberg Law, that debt included over $3 million owed to MCA funders on top of more than $43 million owed on a separate bridge loan.
- Galbreath Restaurant Group (Goodrich Seafood & Oyster House). This 115-year-old Florida restaurant survived over a century in business. High-cost, stacked MCA debt, combined with an outstanding SBA disaster loan, pushed it into Chapter 11 in November 2025.
- Avant Gardner, parent company of Brooklyn’s Mirage event space. This New York entertainment company took on high-cost MCA financing to help fund a major venue renovation. When the renovation ran into delays and permitting problems, several MCA lenders attempted to sweep more than $1 million directly from the company’s bank accounts. Avant Gardner filed Chapter 11 in August 2025, and the dispute with its MCA lenders was ultimately resolved as part of a broader settlement involving its secured lenders.
- A small manufacturer that closed for good. A Montana metal roofing and siding manufacturer took a $350,000 MCA, agreeing to repay $521,500 — a 49% markup. Just 67 days later, the company ran out of cash and filed Chapter 11. Within four months, the case converted to Chapter 7 liquidation, and the business closed, unable to make payroll for its 57 employees.
- A multi-unit restaurant franchise. A 43-location fast-food franchise operator entered bankruptcy in early 2026, owing $1.4 million from a single MCA and revenue purchase agreement carrying a 94% annualized return rate.
- An energy services company. A drilling services company’s bankruptcy case showed stark MCA math: the business owed more than $1 million on an advance that had provided only $650,000 in actual funding — a shortfall a court later cited when unwinding the payments.
These businesses span construction, beauty, food service, entertainment, manufacturing, franchising, and energy services. MCA debt does not target one industry. It targets cash flow, and every business depends on cash flow.
Why Stacking Makes It Worse
Each new MCA adds another daily withdrawal on top of the ones already in place. Owners often don’t realize how much of their revenue is already spoken for. Some MCA contracts include confessions of judgment, which let a funder win a legal judgment without a court hearing. Others place liens on business assets and receivables, which can block a business from getting other financing later. Many owners also sign personal guarantees, meaning they stay on the hook even if the business closes.
Bankruptcy can stop MCA withdrawals, and courts have increasingly scrutinized MCA agreements as disguised loans. But bankruptcy also has lasting effects on credit, vendor relationships, and personal liability. For most owners, it should be a last resort, not a first step.
A Path to Consider Before Bankruptcy
Before you take out another MCA, or file for bankruptcy, it’s worth exploring debt restructuring first. Berkshire Financial Services works with small business owners who are carrying multiple MCAs and feeling the daily cash flow squeeze. Our team reviews your current MCA agreements, looks at your full financial picture, and helps you understand your realistic options for reducing payments and stabilizing cash flow.
The goal is simple: help you avoid stacking another advance on top of the ones you already have, and help you avoid the courtroom if there’s a better way forward.
If your business is struggling under MCA debt, you don’t have to figure it out alone. Don’t wait until your options run out.
To speak with a Berkshire Financial Services Finance Manager about your file, call 1-800-801-1019.
Informational purposes only. Not legal advice. Berkshire Financial Services is not a law firm. Results vary.