In This Article
- 1.Why MCA Companies Will Even Consider This
- 2.What You Should Never Do
- 3.The Right Way to Ask for Reduced Payments
- 4.Step 1: Know your numbers before you call. Pull your last 3 months of bank statements. Know your average daily balance, your monthly revenue, your fixed expenses, and exactly how much you can realistically afford to pay daily. If you go into this conversation without numbers, you're asking for a favor. If you go in with numbers, you're proposing a restructure. Those are two very different conversations.
- 5.Step 2: Put it in writing. Don't just call. Send an email or a formal letter that outlines your current financial situation, the specific reduction you're requesting, and a proposed payment schedule. This does two things — it creates a paper trail, and it signals to the funder that you're serious and organized. MCA companies deal with hundreds of merchants. The ones who communicate professionally get better outcomes. Every time.
- 6.Step 3: Lead with what you can do, not what you can't. "I can't afford $500 a day" is a problem. "I can sustain $250 a day for the next 8 months and you'll get the full purchased amount" is a solution. Frame it as a business proposal. Because that's what it is. You're asking the funder to modify the terms in a way that benefits both of you — they get paid, you stay in business.
- 7.Step 4: Mention the alternative without threatening. You don't need to say "I'll default if you don't work with me." But you can say "I want to continue making payments and fulfilling this agreement, but at the current rate I won't be able to sustain operations past 60 days." Let them do the math. They'll realize that a reduced payment is better than a default, a lawsuit, and a 30 cent recovery.
- 8.Step 5: Ask for it in writing. If they agree to a reduction — and many will, especially if you've presented it properly — get the new terms in writing. A verbal agreement from an MCA company is worth nothing. Get an amendment, a modification agreement, or at minimum an email confirmation that outlines the new daily payment amount, the new duration, and any other changes. If they won't put it in writing, they haven't actually agreed to anything.
- 9.What If They Say No?
- 10.How Long Does This Process Take?
- 11.The Bigger Picture
Most business owners don't know you can do this. They assume the daily ACH is locked in, that the MCA agreement is set in stone, and that the only options are keep paying or default. That's not true. But how you approach this conversation matters more than most people realize.
Short answer: You can ask your MCA company to reduce your daily payments, and many of them will say yes — but only if you do it the right way, at the right time, with the right leverage. If you just call up and say "I can't afford this," you're handing them the reason to accelerate your balance and start the collections process. You need a strategy before you pick up the phone.
1Why MCA Companies Will Even Consider This
Here's what most business owners don't understand about the MCA industry. The funder doesn't want you to default. A default means they have to chase you, hire attorneys, file motions, send UCC notices, and spend months trying to recover money that they may never get back. Collections is expensive. Lawsuits are expensive. And the recovery rate on defaulted MCAs, is not great — most funders recover somewhere between 20 and 40 cents on the dollar after legal fees.
So when you come to them and say "I'm struggling but I want to keep paying," that's actually a better outcome for them than the alternative. They'd rather get $300 a day from you for the next 6 months than spend $15,000 in legal fees chasing a judgment they might never collect on.
This is leverage. You just need to know how to use it.
2What You Should Never Do
Before we get into the right approach, here's what will get you in trouble immediately:
Don't just block the ACH. This is the single worst move you can make. The moment you block the daily debit without the funder's consent, you're in technical default. They can accelerate the full balance, file a confession of judgment (if your agreement has one), and freeze your bank accounts. Blocking the ACH is not a negotiation tactic, it's a trigger.
Don't ghost them. If you stop answering calls and emails, you're telling the funder you've given up. They will escalate faster with someone who's unresponsive than someone who's communicating. Silence is not a strategy.
Don't lie about your financials. If you tell them revenue dropped 50% and they pull your bank statements (which they have the right to do, under most MCA agreements), and they see you're still doing the same volume — you've just destroyed any trust and any chance of a modification.
Don't take on more MCAs to cover the payments. This is stacking, and it makes everything worse. You're now in default on the first MCA (most agreements have a stacking clause), and you've added a second daily payment on top of it. This is the debt spiral that puts businesses under.
3The Right Way to Ask for Reduced Payments
4Step 1: Know your numbers before you call. Pull your last 3 months of bank statements. Know your average daily balance, your monthly revenue, your fixed expenses, and exactly how much you can realistically afford to pay daily. If you go into this conversation without numbers, you're asking for a favor. If you go in with numbers, you're proposing a restructure. Those are two very different conversations.
5Step 2: Put it in writing. Don't just call. Send an email or a formal letter that outlines your current financial situation, the specific reduction you're requesting, and a proposed payment schedule. This does two things — it creates a paper trail, and it signals to the funder that you're serious and organized. MCA companies deal with hundreds of merchants. The ones who communicate professionally get better outcomes. Every time.
6Step 3: Lead with what you can do, not what you can't. "I can't afford $500 a day" is a problem. "I can sustain $250 a day for the next 8 months and you'll get the full purchased amount" is a solution. Frame it as a business proposal. Because that's what it is. You're asking the funder to modify the terms in a way that benefits both of you — they get paid, you stay in business.
7Step 4: Mention the alternative without threatening. You don't need to say "I'll default if you don't work with me." But you can say "I want to continue making payments and fulfilling this agreement, but at the current rate I won't be able to sustain operations past 60 days." Let them do the math. They'll realize that a reduced payment is better than a default, a lawsuit, and a 30 cent recovery.
8Step 5: Ask for it in writing. If they agree to a reduction — and many will, especially if you've presented it properly — get the new terms in writing. A verbal agreement from an MCA company is worth nothing. Get an amendment, a modification agreement, or at minimum an email confirmation that outlines the new daily payment amount, the new duration, and any other changes. If they won't put it in writing, they haven't actually agreed to anything.
9What If They Say No?
Some funders won't negotiate. Period. They have a business model built on aggressive collections and they'd rather chase the judgment than take a haircut on the daily payment. If that's who you're dealing with, you have a few options.
You can bring in a debt settlement company (like us) who has existing relationships with these funders and knows what they'll actually accept. Most MCA companies will negotiate with a professional intermediary, before they'll negotiate with the merchant directly. That's just how the industry works. The funder knows that a settlement company showing up means the merchant has options, and that changes the dynamic entirely.
You can also consult with an attorney who specializes in MCA defense. If your agreement has a confession of judgment, or if the funder has already filed, an attorney can challenge the filing, argue for vacatur under CPLR 5015, or negotiate from a legal position that the funder has to take seriously.
10How Long Does This Process Take?
If you approach it correctly — with documentation, a clear proposal, and consistent communication — most funders will respond within 1 to 2 weeks. Some will counter-offer. Some will ask for additional bank statements or financials before making a decision. The process is not instant, but it moves faster than most people expect.
The key is to start this conversation before you're in default. Once you've missed payments, the funder's posture changes completely. You go from "merchant requesting a modification" to "merchant in default." And those are two very different categories in the eyes of an MCA company.
11The Bigger Picture
If you're reading this, you're probably already behind or close to it. That's fine. Most of the business owners we talk to are in the same position. The mistake isn't getting into an MCA — sometimes it's the only option available. The mistake is waiting until the ACH bounces, the calls start, and the UCC notices go out, before you do anything about it.
You have more leverage than you think. But that leverage has an expiration date. The further into default you go, the less willing the funder is to work with you, and the more expensive the resolution becomes. Every day you wait is a day the funder's legal team is getting closer to filing.
If you can't get the reduction on your own, get help. But either way, do something. The worst outcome in the MCA world isn't owing money. It's owing money and doing nothing about it.