6 Expenses You Should Pay Before Your MCA (And Why)

The MCA withdrawal arrives first because it is automated. It should be paid last because it is the most negotiable.

A daily ACH debit processes at the speed of the banking system: automatically, silently, and without regard for what the business needs to spend that day. This automation creates a false priority. The withdrawal arrives before you decide to pay it, and so it is paid before anything else by default, not by design.

When the account balance is insufficient to cover all obligations, the business owner must impose an order of priority that the automation does not provide. That order should reflect legal obligation, operational necessity, and negotiability, in that sequence.

Payroll and Employment Taxes

Employees are not creditors. They are the workforce that generates the revenue the MCA purchased. Wage payment is governed by statute, not contract. The penalties for late payment are imposed by government authority, not by commercial negotiation. Payroll taxes (withholding, FICA) held in trust for the IRS carry personal liability for the responsible officer. These are not deferrable.

Rent or Lease Payments

The space in which the business operates is the physical prerequisite for revenue. Eviction proceedings, once initiated, cannot be paused by an MCA settlement. The landlord is not a party to your MCA dispute. Loss of premises is loss of the business.

Business Insurance Premiums

A lapse in general liability, professional liability, or workers' compensation coverage exposes the business to uninsured claims and, in the case of workers' compensation, potential criminal liability. Insurance carriers cancel for non-payment on defined timelines. Reinstatement, if available, carries higher premiums.

Essential Vendor Payments

The vendors who supply your primary inventory or materials determine whether you can fulfill orders and generate revenue. A vendor who places you on COD or suspends your account reduces your revenue capacity, which accelerates the MCA default you are trying to prevent.

Utility Payments

Electricity, water, internet, phone: the infrastructure of operation. Disconnection timelines vary by jurisdiction and provider, but the consequence is the same: a business without utilities cannot operate.

The MCA Payment

DEFENSE TEAM SPOTLIGHT

Todd Spodek

Lead Attorney & Founder

Featured on Netflix's "Inventing Anna," Todd Spodek brings decades of high-stakes criminal defense experience. His aggressive approach has secured dismissals and acquittals in cases others deemed unwinnable.

NY Bar Admitted Multi-State Licensed Federal Courts

Meet the Full Team

The MCA withdrawal comes last in this hierarchy because it is the obligation with the most legal options. Reconciliation can reduce it. A legal challenge can void it. A settlement can resolve it at a fraction of the face value. Bankruptcy can halt it entirely. None of these remedies are available for payroll taxes, rent, or insurance.

The MCA is the loudest creditor and the most negotiable one. Volume is not priority.

Paying the MCA first and deferring everything else preserves the funder's cash flow at the expense of the business's viability. An attorney can construct a payment priority that preserves the business while addressing the MCA through legal channels.