Article summary
A new Wall Street Journal review finds MCA funders among creditors in more than half of small-business bankruptcies, as filings rose 36% this year. Here's what the story found and what it means for you.
Article content
A new report from The Wall Street Journal puts hard numbers on something many business owners already feel: merchant cash advances are showing up in a lot of small-business bankruptcies.
According to the Journal's October 29 story, federal bankruptcy filings by small businesses (those owing $3.4 million or less) rose 36% in the first nine months of 2026 compared with the same period last year, based on American Bankruptcy Institute data.
The Journal's own review of those filings found that creditors in more than half of the cases included companies that offer MCAs.
One federal bankruptcy judge in Tampa told the paper: "Virtually every small-business case we see has at least one and sometimes several or more MCA funders." What the story found The article follows Triways, a family-owned trucking and warehouse company in Southern California that had about $10 million in revenue in 2024.
To fund growth and cover a cash gap while waiting on a tax refund, the owner took an MCA in late 2023.
Over roughly two and a half years, the company ended up taking more than 30 advances, often using new ones to pay off old ones.
A few details from the story stand out: One advance carried an estimated annual percentage rate of 2,190%, according to a disclosure document.
In one stretch, four advances obligated the company to pay about $771,500 in exchange for roughly $470,000.