WSJ Report on MCA Providers in Small-Business Bankruptcies

The Wall Street Journal published an October 29, 2026 story on merchant cash advances and small-business bankruptcies. We opened a syndicated reprint and several primary sources. Under our 100% rule, we are reporting only what we can check independently. Claims that rest only on the Journal (or its Hindustan Times syndicate reprint) — including any share of cases with MCA creditors, specific contract APRs, dollar figures, and attributed quotes — are omitted here until those primaries are opened.

What we could verify

American Bankruptcy Institute (Oct. 8, 2026). ABI's public release reports 2,442 Subchapter V elections in the first nine months of 2026, up 46% from 1,672 a year earlier. That release does not contain a 36% figure for small-business bankruptcies. Any "36%" figure attributed to ABI in secondary coverage is not confirmed by that ABI release.

Federal Reserve Banks, 2026 Report on Employer Firms (2025 Small Business Credit Survey). Among firms that applied for a loan, line of credit, or merchant cash advance, 12% applied for a merchant cash advance (chart: "Application Rate by Type of Loan, Line of Credit, or Merchant Cash Advance," N=2,450 applicants). That denominator is loan/LOC/MCA applicants, not all financing seekers and not all small businesses. The same report separately states that 8% of firms applied for a merchant cash advance. A prior-year "9%" figure was not verified in this primary report and is not repeated here.

What this means for you

You don't need to panic if you have an MCA. The practical steps below do not depend on the Journal's unverified case statistics:

1. Know your balance on each advance. If your MCA has a fixed total payback amount, each payment you make (often a daily or weekly ACH debit) chips away at it. If you can't say roughly 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?

2. Add up all your payments, not just one. 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 payment 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.

4. Read the disclosure. California and New York require providers to give an estimated APR on covered sales-based financing offers. Vermont has passed a similar requirement, but it doesn't take effect until July 1, 2027. When an offer includes that number, use it to compare offers.

5. 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 advances in one place

Funding Tracker is built to help merchants track advances they already have in one place. A funder's written payoff letter remains the official payoff number. For a spreadsheet start, see How to Track Daily MCA ACH Payments.

Sign up at fundingtracker.app: https://fundingtracker.app/auth?mode=signup

Sources

• American Bankruptcy Institute, "Small Business Subchapter V Elections Increase 46% Compared to Last Year," Oct. 8, 2026: https://www.abi.org/node/1004094
• Federal Reserve Banks, 2026 Report on Employer Firms (2025 SBCS): https://www.fedsmallbusiness.org/reports/survey/2026/2026-report-on-employer-firms (PDF opened this turn)
• Vermont Statutes, 8 V.S.A. § 2247 (effective July 1, 2027): https://legislature.vermont.gov/statutes/section/08/073/02247
• New York DFS, Commercial Finance Disclosure Law regulation (Feb. 1, 2023): https://www.dfs.ny.gov/reports_and_publications/press_releases/pr202302011
• California DFPI, commercial financing disclosure regulations: https://dfpi.ca.gov/wp-content/uploads/sites/337/2022/06/PRO-01-18-Commercial-Financing-Disclosure-Regulation-Final-Text.pdf
• WSJ story URL (paywalled; not relied on for money/legal claims): https://www.wsj.com/business/entrepreneurship/business-finance-merchant-cash-advance-37d8bc42
• Hindustan Times syndicate reprint (secondary only; not relied on for money/legal claims): 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.