What MCA Reconciliation Means When You've Missed a Payment

Here's how it works. When you signed your MCA agreement, the funder purchased a percentage of your future receivables. Let's say 15%. That means if you make $10,000 in a week, they're entitled to $1,500. Not $2,000. Not $3,000. $1,500.

The problem is, the daily ACH debit they set up doesn't actually track your revenue in real time. They estimate your revenue, calculate a fixed daily amount, and pull that amount every single business day regardless of whether you had a good week or a terrible one. The reconciliation clause is what corrects that.

Under reconciliation, you submit your recent bank statements (usually 3 months), your payment processing statements, and any other revenue documentation the funder requests. They're supposed to recalculate your daily payment based on what you're actually bringing in. Not what they projected. Not what they hoped. What's real.

If you've missed a payment — or you're about to — reconciliation is the first move you should be making. Not the last. Here's why.

Most MCA defaults happen because the payment amount is too high relative to what the business is actually earning. The business didn't fail. The payment structure failed. And the MCA agreement, in most cases, has a built-in mechanism to fix exactly that.

Think about it this way. If your revenue dropped 40% since you took the advance, but your daily payment stayed the same, the funder is effectively taking a larger percentage of your receivables than what they purchased. That's not what the contract says. That's an overpayment.

Reconciliation lets you claw that back. In some cases, the funder owes you money. Not the other way around.

This is where it gets tricky, because funders will do everything they can to slow-walk this process, ignore your request, or flat out deny it without legal basis.

Here's the process:

Review your MCA agreement. Look for the reconciliation clause — it's usually in the section about payment adjustments or true-ups. Some agreements call it "reconciliation," some call it "revenue adjustment," some bury it in language about the purchased percentage. It's there. Find it.

Gather your bank statements. You'll need 3 months minimum, sometimes 6. The funder will want to see your actual deposits, your actual revenue, and compare it to what they projected when they funded you.

Submit a formal written request. Do not call and ask verbally. Do not text your rep. Send a written request — email at minimum, certified letter is better — citing the specific clause in your agreement and attaching your documentation. You want a paper trail.

Track the response timeline. Most agreements require the funder to respond within 7 to 14 business days. They won't. They'll stall. But the clock starts when you send the request, and that matters if this ends up in front of a judge.

Let's be honest about this. Most funders treat reconciliation requests the same way they treat everything else — as an obstacle to getting their money back as fast as possible.

Here's what you should expect:

They'll ignore the request entirely. You'll send it, and nothing happens. No response, no acknowledgment, no adjusted payment. The ACH keeps hitting your account at the same amount. This is the most common outcome, and it's also the most legally actionable one.

They'll deny it without basis. They'll send back something vague — "your request does not meet the criteria for adjustment" — without showing you the math or citing the contractual provision that supports the denial. This is, in most cases, a breach of the agreement on their part.

They'll reduce the payment, but not enough. They'll run the numbers in a way that's favorable to them, not to you. They'll exclude certain deposits, reclassify revenue, or use a different calculation period than what the contract specifies. You need to check their math. Every time.

They'll use the reconciliation request as a trigger to accelerate. This is the ugly one. Some funders treat a reconciliation request as a signal that you're struggling, and instead of adjusting the payment, they accelerate the entire balance and start the collections process. This is legally questionable (you're exercising a contractual right, not defaulting), but it happens.

Here's what most business owners miss. If you requested reconciliation, followed the process in your agreement, and the funder ignored it or denied it improperly — you may have a defense against the default itself.

Think about that for a second. The funder is claiming you defaulted. But you exercised a contractual right to have your payments adjusted, they refused, and the payments you couldn't afford were payments you shouldn't have been making in the first place, at that amount.

That's not a default. That's an overpayment dispute. And in front of a judge, especially in New York (where most MCA cases are litigated), that distinction matters.

Don't confuse these. Reconciliation is a contractual adjustment to your ongoing payments. Settlement is a negotiated payoff of the remaining balance, usually at a discount, after you've already defaulted or are in the process of defaulting.

Reconciliation keeps the agreement alive. Settlement ends it.

If you're behind on payments but the business is still operating and generating revenue, reconciliation should be your first move. You're not admitting you can't pay. You're asserting that the payment amount doesn't match what the contract actually says.

If the business has already cratered, revenue is gone, and the funder is in full collections mode — that's settlement territory. Different conversation, different strategy.

Don't panic. Don't ignore the calls. And don't let the funder set the terms of what happens next.

Pull your MCA agreement and find the reconciliation clause. Gather your last 3 to 6 months of bank statements. Calculate what your daily payment should actually be based on your real revenue and the purchased percentage in your contract. Submit a formal written reconciliation request.

And if the funder ignores it, denies it without basis, or tries to accelerate — that's when you need someone in your corner who understands how these agreements actually work, not how the funders want you to think they work.