How to ask your MCA company for reduced daily payments

If your daily ACH is killing your business, you can ask your MCA funder for a reduction. It’s called a reconciliation, or a modification, depending on the funder. Most MCA agreements have a reconciliation clause baked in. Most business owners don’t know it exists. The funders aren’t going to remind you.

Short answer: You call your funder, you tell them your revenue is down, you ask for a temporary reduction in the daily payment, and you back it up with bank statements and processor reports. If the contract has a reconciliation clause (almost all do), they are contractually obligated to consider it. Whether they actually grant it, is a different question. This article walks you through how to ask, what to send, and what to do when they say no.

What is a reconciliation, actually

A reconciliation is the mechanism inside your MCA contract that lets the daily, or weekly, payment get adjusted, when your revenue drops. The logic is simple – the MCA isn’t a loan, it’s a purchase of future receivables. If the receivables shrink, the payment is supposed to shrink with them. That’s the entire legal theory that lets MCAs exist outside of usury laws. So the reconciliation clause isn’t a favor, it’s the thing that makes the deal a “purchase” instead of a loan.

Funders know this. That’s why they bury the clause, make the process annoying, and train their reps to push back. But the clause is there, and you have the right to invoke it.

When you should ask for one

You should ask for a reconciliation the moment you can see the math isn’t working. Not after you’ve missed payments. Not after you’ve blocked the ACH. Before. Once you default, the conversation changes completely – now you’re a collections file, not a customer.

Specifically, ask when:

• Your monthly revenue has dropped 20%+ from what it was when you signed
• The daily payment is now eating more than 15-20% of your daily deposits
• You’re robbing one account to feed another to keep the ACH clearing
• A seasonal slowdown is coming, and you can see it on the calendar
• You lost a major customer, contract, or revenue channel

If any of those are true, you have a legitimate basis to ask. Don’t wait until you’re three NSFs deep, by then the funder’s posture has already hardened.

What to send them

This is where most business owners blow it. They call up, they say “business is slow, I need a break,” and the rep says no. Then they hang up and assume the door is closed. It’s not closed. They just didn’t give the funder anything to work with.

Here’s what you actually send:

• The last 3-4 months of business bank statements. All pages, not just the summary. The funder needs to see deposits trending down.
• Processor statements (Stripe, Square, whatever you use), showing the same trend
• A short written request, one page, that states – the original funded amount, the daily payment, your current average daily deposits, the requested new daily payment, and how long you need the reduction for
• A reason. “Revenue is down” isn’t enough. “We lost our largest account in February, which represented 38% of monthly revenue, and we’re rebuilding the pipeline” – that’s a reason. Specific. Verifiable. Tied to the numbers in the statements.

Send it in writing, by email, to the funding rep AND to the funder’s general servicing/support email. Get it on the record. Always get it on the record. If this ends up in litigation later, the email trail is what saves you.

What to actually ask for

Don’t ask for forgiveness. Don’t ask to skip payments. Ask for a temporary reduction to a specific dollar amount, for a specific number of days, with a review date.

Example – “We are requesting a temporary reduction of the daily ACH from $1,450 to $600, for a period of 60 days, with a review on [date], at which point we will provide updated bank statements and discuss returning to the original payment schedule.”

That language does three things. It’s specific, so the funder can actually approve or deny it. It’s temporary, so it doesn’t sound like you’re trying to walk away from the deal. And it builds in a review date, which gives the funder a sense of control. Funders give reductions when they feel in control. They deny them when they feel like they’re being managed.

What the funder will probably do

A few things tend to happen, in this order.

1. The rep will say no on the first call. This is almost universal. They are trained to. Don’t take it personally, and don’t accept it as final. Ask them to escalate to underwriting, or to the reconciliation department. Most funders have one – they just don’t advertise it.

2. They’ll ask for more documents. Send them, fast. Every day you delay, the file gets older, and the urgency drops. If they ask for a P&L, send a P&L. If they ask for a balance sheet, send one. Don’t argue about what they “should” need.

3. They’ll counter with something smaller than you asked for. You ask for $600, they offer $1,100. This is normal – it’s a negotiation. Take it if you can survive on it. A partial win is still a win, and it keeps you out of default, which is the entire point.

4. They might require something in exchange. A new personal guarantee. An additional UCC. A higher payment on the back end. Read whatever they send you carefully, and ideally, have someone who knows MCA paper review it before you sign. Some “modifications” are actually a way to extend the deal, increase the total payback, and lock you in deeper.

When they say no

Sometimes they say no, and they mean it. When that happens, you have a few options, and none of them are great, but some are a lot worse than others.

• Ask again, with better documentation. Sometimes the first no is a reflex. A second request, with cleaner numbers and a clearer reason, sometimes gets a different answer.
• Negotiate a settlement. If the funder won’t reduce, but you genuinely can’t pay, the conversation shifts to what you can pay, in total, to close out the balance. This is its own playbook.
• Bring in a third party. A debt restructuring firm, or an attorney who actually does MCA work (most don’t), can often get a reconciliation that the business owner couldn’t get on their own. Funders take the call differently when it comes from a firm that has leverage.
• Don’t just block the ACH. This is the move business owners make when they’re out of options and out of patience, and it’s the single fastest way to convert a workable situation into a default, an acceleration, and a UCC lockout. Read our article on what happens when you default before you do anything reactive.

The thing nobody tells you

Funders reduce payments more often than people think. They just don’t reduce them for people who ask badly, or wait too long, or sound desperate, or don’t have documentation. The funder’s worst outcome isn’t a reduced payment – it’s a defaulted file that goes to litigation, takes 8-14 months to collect on, and recovers 30 cents on the dollar after legal fees. A reduction, for them, is often the rational choice. Your job is to make it easy for them to make that choice.