# WSJ: MCA Funders Show Up in Half of Small-Biz Bankruptcies > 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. - URL: https://fundingtracker.app/blog/mca-funders-in-half-of-small-business-bankruptcies - Published: 2026-11-04 - Updated: 2026-11-04 - Author: Funding Tracker Team - Category: Industry News 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. - On one day in November 2025, a new deal brought in $427,500, but most of it went to pay off earlier advances and a loan. The company kept about $5,816 for operating costs. - At its peak, Triways cited MCA payments of about $250,000 a month in court filings. It closed in September 2026. The Journal also cites the Federal Reserve Bank of Kansas City, which said in October that small businesses have been "increasingly seeking liquidity through merchant cash advances," and that MCAs "have exacerbated the difficulties" those businesses face. A Fed survey found 12% of small businesses seeking financing applied for an MCA last year, up from 9% the year before. The industry's side is in the story too. Steve Denis of the Small Business Finance Association said alternatives to bank financing matter for businesses that need fast cash, and that the group is working to remove abusive practices and bad actors. ## What this means for you You don't need to panic if you have an MCA. Plenty of owners use one for a short, specific need and pay it off. One bankruptcy attorney quoted in the story put it simply: an MCA can make sense for an immediate need you can repay fast, but "don't use an MCA as a line of credit." The trouble in this story didn't come from one advance. It came from losing track as advances piled up. Here's how to stay out of that trap: **1. Know your real balance every day.** Each MCA has a total payback amount. Your daily or weekly ACH debits chip away at it. If you can't say how much you still owe on each advance right now, that's the first thing to fix. Our guide walks through the simple math: [How Much Do I Still Owe on My MCA?](https://fundingtracker.app/blog/how-much-do-i-still-owe-on-my-mca) **2. Add up all your debits, not just one.** Stacking is where cash flow breaks. Two or three advances that each feel fine can add up to more than your account can handle on a slow week. Total every daily and weekly debit and compare it to what really comes in. **3. Look at what a "payoff" deal really gives you.** When a broker offers a new advance to pay off old ones, check how much cash actually lands in your account after the payoffs. In the Triways case, a $427,500 deal left about $5,800 for the business. **4. Read the disclosure.** California, New York, and Vermont now require estimated APR disclosures on MCAs, and about a dozen states have passed MCA laws. Use that number when you compare offers. **5. Watch for UCC lien notices.** When a business falls behind, funders can send notices to your customers or payment processors asking them to pay the funder instead. Knowing where you stand early gives you more room to talk before it gets there. **6. Get help early.** If payments are eating your operating cash, talk to a lawyer or financial advisor before you take another advance, not after. ## Track it in one place Funding Tracker helps merchants see every advance, every ACH debit, and every balance in one place, so you always know what you owe and when you'll be paid off. If you want a hands-on start, see [How to Track Daily MCA ACH Payments](https://fundingtracker.app/blog/how-to-track-daily-ach-payments-merchant-cash-advance). Sign up at fundingtracker.app: https://fundingtracker.app/auth?mode=signup ## Sources - The Wall Street Journal, "The Easy Money Offers That Disguise a Deathtrap for Small Businesses," Oct. 29, 2026: https://www.wsj.com/business/entrepreneurship/business-finance-merchant-cash-advance-37d8bc42 - Syndicated copy via Hindustan Times, Oct. 30, 2026: https://www.hindustantimes.com/world-news/the-easy-money-offers-that-disguise-a-deathtrap-for-small-businesses-101793330502874.html *Funding Tracker is not a lender, broker, or funder, and does not provide loans, cash advances, or legal or financial advice. This post is for general information only.*