Can You Refinance Business Debt with an SBA Loan? Yes — But There’s a Catch in 2025
If high-interest business debt is straining your cash flow, you might be wondering:
“Can I refinance this with an SBA loan?”
The short answer: yes — and it can be a game-changer. SBA 7(a) loans are one of the best ways to consolidate business debt, lower monthly payments, and stabilize long-term finances. At Funding Suite, we help business owners restructure their obligations through SBA-backed refinancing strategies every day.
But in 2025, a key rule has changed:
SBA loans can no longer be used to refinance Merchant Cash Advance (MCA) debt.
Before you worry, here’s the good news: Funding Suite has a solution. We can help you refinance MCA debt with non-SBA options, and prepare your business to qualify for a clean SBA refinance in the near future.
What Is SBA Debt Refinancing?
An SBA 7(a) loan allows you to refinance eligible business debt with the goal of:
- Reducing your interest rate
- Stretching repayment over longer terms (up to 10 years)
- Lowering your monthly burden
- Improving your debt service coverage ratio (DSCR)
- Simplifying your payments
Debt That Can Be Refi’d with SBA 7(a)
You can use an SBA loan to refinance:
- Credit cards and high-interest short-term loans
- Business term loans (non-SBA)
- Equipment loans and leases
- Business lines of credit (properly documented)
- Older SBA loans in some cases
Important: The refinance must meet the SBA’s “substantial benefit rule,” typically showing a 10% improvement in monthly cash flow.
New in 2025: SBA Loans Can’t Refinance MCA Debt
As of 2025, the SBA now prohibits using SBA loan proceeds to refinance Merchant Cash Advances (MCAs).
This rule matters because MCA debt is one of the most burdensome types of financing for business owners — with daily or weekly withdrawals, short terms, and interest rates often exceeding 50–100% APR.
Why the change?
- MCAs are not technically loans — they’re “sales of future receivables”
- The SBA wants to avoid using federal-backed funds to rescue high-risk, non-regulated capital structures
🛠 How Funding Suite Helps Refinance MCA Debt — the Smart Way
Just because SBA can’t refinance your MCA directly doesn’t mean you’re stuck.
At Funding Suite, we help you take a two-step approach:
1. Refinance Your MCA Using Short-Term, Strategic Capital
We partner with trusted non-SBA lenders who offer responsible MCA relief solutions with:
- Longer terms
- Weekly or monthly repayment (instead of daily)
- Lower effective interest rates
2. Rebuild Your SBA Eligibility for a Future Refinance
Once the MCA is cleared or refinanced, we help you:
- Reorganize your balance sheet
- Improve your DSCR and cash flow
- Prepare a clean, SBA-eligible refinance package
In many cases, our clients return in 6–12 months ready for SBA approval — this time with stronger financials and a story lenders will back.
Real-World Example: How Much Can You Save?
Client Profile:
- $200K in short-term loans (including an MCA at 80% APR)
- Monthly payments: $13,000
- After MCA restructuring and SBA refinance: New monthly payment = $3,400
Result:
➡️ Over $9,000/month in improved cash flow
➡️ Stabilized growth
➡️ Full SBA eligibility within 9 months
Why Work with Funding Suite?
SBA rules are changing — and not every lender knows how to navigate them.
At Funding Suite, we:
- Provide real SBA and non-SBA strategy, not just quotes
- Match you with the right lender for your unique debt situation
- Help you get out of high-cost debt fast
- Position you for long-term, low-cost SBA funding when you’re ready
We don’t just get you funding — we help you get your business back in control.
Let’s Refinance Your Debt the Smart Way
If SBA isn’t an option right now due to MCA debt — we can help you bridge the gap and come back stronger.
📞 Book a Free SBA Strategy Call
📧 info@fundingsuite.co
🌐 www.fundingsuite.co
Let’s restructure your debt, rebuild your profile, and put you on track for real SBA funding success.
Funding Suite | Business Loan Strategy. Built Around You.
Tags: SBA loan debt refinancing, SBA loan 2025 rules, refinance business debt, MCA refinancing, SBA refinance restrictions, business loan strategy, small business loans, Funding Suite, merchant cash advance, SBA 7a loan
