5 Things to Do Today If You Cannot Make Tomorrow’s MCA Payment

Tomorrow morning, at a time you did not choose, the ACH withdrawal will attempt to process. It will fail. And then, on a timeline measured in hours rather than days, the contract you signed will begin to do the things it was written to do.

This is not the moment for planning. This is the moment for five specific actions, performed today, in this order.

Locate Your MCA Agreement and Read the Default Provisions

The agreement is in a file, or a drawer, or an email attachment you have not opened since the funds arrived. Find it. Read the section titled "Default" or "Events of Default." What you are looking for is the acceleration clause: the provision that converts the remaining balance into a single, immediate obligation upon a missed payment. Nine of the last twelve agreements we reviewed triggered acceleration on the first missed withdrawal. Not the third. The first.

You need to know what the contract says will happen tomorrow. Most business owners discover the terms of default after it has occurred. By then, the funder's legal machinery has already begun to move.

Call an Attorney Before You Call the Funder

The instinct is to call the funder and explain. This instinct, while human, is premature. The funder's representative has conducted this conversation hundreds of times. You have conducted it never. Anything you say, any concession you make, any promise of payment you offer, becomes part of the record the funder will use if the matter escalates.

An attorney who practices MCA defense can advise you on what to say, what not to say, and what legal rights you possess before the first collection call arrives. The consultation takes less time than the funder's hold music.

The funder has an attorney. As of this morning, you do not.

Invoke Reconciliation in Writing

If your revenue has declined and your agreement contains a reconciliation clause (it does; virtually all of them do), send a formal written request for payment adjustment today. Not tomorrow. Not after the missed payment. Today. Before the default.

A reconciliation request submitted before default establishes that you were acting in good faith, that you recognized the revenue decline, and that you exercised the contractual right the funder was required to provide. If the funder denies or ignores the request, that denial becomes evidence in any subsequent dispute.

Send the request via certified mail and email simultaneously. Attach your most recent bank statements or processor reports showing the revenue decline. Cite the reconciliation clause by section number. Keep copies of everything.

Open a Second Business Account

If you do not already have a second business bank account at a different institution, open one today. Direct any incoming receivables, customer payments, or deposits to the new account. The original account, the one linked to the ACH authorization, remains open. You are not closing it. You are not hiding it. You are ensuring that your operating funds are not entirely exposed to the consequences of tomorrow's failed withdrawal.

A single funder's failed ACH attempt generates overdraft fees. Multiple failed attempts (and funders will attempt more than once) can drain the account below the level required for payroll, rent, and insurance. The second account is the firewall between a missed MCA payment and a missed payroll.

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Do Not Accept a New Advance

Between today and Friday, a broker will call. The broker will offer a new MCA to cover the shortfall, or a "reverse consolidation" that replaces your current obligation with a larger one. The offer will sound like relief. It is not. It is a new purchase of your future receivables at a higher factor rate, and it will extinguish whatever legal defenses the current agreement may contain.

Every defense described in this article, every reconciliation right, every potential usury challenge, belongs to the contract you signed. A new advance pays off that contract and replaces it with one drafted to avoid the deficiencies of its predecessor.

The call is coming. Say no. Then call an attorney. That conversation is where this begins to resolve.