How to Ask Your MCA Company for Reduced Daily Payments

If your business revenue has dropped but your MCA company is still taking the same daily payment, read your agreement before you call anyone. Many merchant cash advance agreements say the funder purchased a percentage of your future receivables. The daily payment is supposed to roughly match that percentage. If sales fall but the withdrawal does not, the reconciliation provision is where you start.

Most business owners never use it.

Do the arithmetic first

Assume your agreement says the company purchased 15% of your receivables. Your business brings in $40,000 for the month. Fifteen percent is $6,000. The MCA company takes $9,400. That is what the reconciliation request is about.

Find the reconciliation section in your agreement. It may use words like reconciliation, remittance, receivables, adjustment, estimated payment, or purchased percentage. Read the actual provision. It should tell you what records have to be provided, what period the funder reviews, how an adjustment is calculated, and where the request has to be sent. Follow the contract.

Courts also look at reconciliation when deciding whether an MCA agreement actually operates as a purchase of receivables. In LG Funding v. United Senior Properties, reconciliation was one of the factors considered in deciding whether the transaction was a true purchase or really a loan. If payments rise and fall with actual revenue, the MCA company is taking some of the risk. Collecting the same amount regardless of what the business earns starts to look different.

Put the request in writing

Do not handle the request only by phone. You can call the MCA company, but a phone call does not give you the same record as a written request. Send the request using the notice procedure in your agreement. If the contract gives a specific mailing address or email address, use it.

Identify the reconciliation section, state the purchased percentage, and provide your recent revenue. Attach the bank statements. State what the company has actually withdrawn.

There is no reason to turn it into a long hardship letter. The issue is the math. Using the numbers above, the bank statements show what came into the account and the withdrawals show what went out. Put them next to each other and ask for the adjustment provided for in the agreement. That is harder to sidestep than a general complaint that business is slow.

Send it early, and keep the record

Many business owners keep allowing the full daily withdrawal until the account is nearly empty and only then ask for relief. By then the business may already be in serious financial distress. A reconciliation request makes more sense when the statements first begin showing the mismatch. Revenue went down. The MCA payment did not.

If the agreement requires written notice, send written notice. Certified mail or another service that confirms delivery gives you a record that the request arrived. Save the supporting statements and whatever comes back from the funder. Save the withdrawal records too, especially if the same debit continues after the request was received.

What happens next varies. Some companies review the statements and change the payment. Others offer a temporary adjustment or ask for more financial information. A denial is possible. So is no response at all.

Why a refusal still matters

In 2024, the New York Attorney General sued Yellowstone Capital and related companies over their merchant cash advance practices. The case eventually resulted in a judgment exceeding $1 billion and the cancellation of hundreds of millions of dollars in merchant obligations. One of the larger issues surrounding MCA agreements is whether a transaction labeled as a purchase of receivables actually behaves like one.

Reconciliation goes directly to that question. A company that reviews the merchant's actual revenue and changes the payment is behaving differently from one that insists on the same fixed withdrawal regardless of revenue.

No response can matter too. The letter shows that the request was made. The delivery confirmation shows that it arrived. The bank records show what happened afterward.

Do not stop the debits on your own

Do not assume that sending a reconciliation request gives you the right to block the ACH withdrawals. Many MCA agreements treat a missed or blocked payment as a default, and the consequences can include additional fees, collection activity, litigation, UCC enforcement, or other remedies contained in the contract. Have the agreement reviewed before deciding to stop payments. The reconciliation request itself does not stop the debit.

There is another problem when the business has more than one MCA. Suppose three different companies are taking $500, $700, and $900 per day. Getting one of them to reduce its payment by $200 still leaves the business paying $1,900 every day to the remaining positions. Reconciliation with one funder does not solve that problem. The entire MCA stack has to be looked at together.

Where to start

If revenue has dropped and the payment has stayed the same, start with the agreement. Find the reconciliation provision and pull the bank statements. Compare the percentage the funder says it purchased against what it is actually taking, then put the request in writing.

You are trying to accomplish one of two things: get the payment brought closer to the business's actual receivables, or create a clear record of what happened when you asked the funder to apply its own reconciliation provision.

Do not wait until the daily withdrawals have drained the business. A consultation is where we review the MCA agreement, determine whether reconciliation applies, calculate the appropriate payment, and prepare the request. Call (888) 837-7053, or send the agreements to Delancey Street.