5 MCA Letters to Prepare: Templates for Requests, Settlement and Account Records

A useful letter creates a record of a specific request, without claiming powers the sender does not possess. That distinction matters when an MCA owner copies language written for consumer debt into a commercial dispute.

The Consumer Financial Protection Bureau’s explanation of debt collection protections states that the federal Fair Debt Collection Practices Act does not cover business debt. A heading that says “validation demand” does not change the purpose of the underlying transaction.

These five samples are starting points for adaptation to the agreement and circumstances. They serve different functions and should not be sent as a package. Where litigation, disputed liability or a guaranty is involved, counsel should review the proposed communication before delivery.

1. A reconciliation request should invoke the actual clause

The request begins with the agreement’s procedure. Identify the clause, the receipts period and the records it requires. Do not substitute a preferred percentage or deadline for the language the parties signed.

In LG Funding, LLC v. United Senior Properties of Olathe, LLC, reconciliation was among the features considered in evaluating repayment risk. The decision supports examining the contract; it does not impose a universal recalculation process on every funder.

Sample: “Re: [business legal name; agreement date; account reference]. Under section [number] of our agreement, the business requests reconciliation for [period]. Attached are [required records], showing receipts of [amount] for that period and remittances of [amount]. Please provide the calculation under the agreement and identify any additional records required to evaluate this request.”

Add the requested treatment only after checking the clause. The contract may distinguish a payment adjustment from a refund or another reconciliation result. State the applicable request and retain the attachments with the delivery record.

2. A payoff request should separate the balance from the release

A balance stated in a telephone conversation can become obsolete before the owner transfers funds. Request a written calculation tied to an intended payment date and the particular agreement.

Sample: “Please provide the amount your company requires to satisfy [identified agreement] through [date], with an itemization of the calculation and credit for payments received. Please identify any conditions affecting that amount, the authorized recipient of payment, and the documents you will provide after satisfaction.”

Ask separately about a guaranty and any financing statement. A payoff figure answers how much the recipient demands. It does not establish that every related obligation or public filing will be resolved by the same transfer.

Where more than one entity has contacted the business, obtain an explanation of who can accept payment and provide the requested release. Use a known contact method to verify instructions before transmitting funds.

3. A settlement offer must describe the proposed exchange

The strongest offer presents an amount the business can perform and explains what it requests in exchange. It should identify the agreements and parties, including any individual whose guaranty requires treatment.

Sample: “The business proposes payment of [amount] on [date or schedule] to resolve [identified agreements and claims], subject to a definitive written agreement addressing the releases, any pending litigation, and the required financing statement action. Please confirm whether you are authorized to negotiate these terms and provide a proposed written agreement for review.”

Do not insert funds that are merely hoped for. If the amount depends on a contribution or sale, describe that condition accurately and decide whether the offer should wait until the source is established.

The phrase “subject to” is not a substitute for advice about contract formation. Avoid treating correspondence as harmless because it carries a settlement label. Counsel should review the wording where admissions, limitation periods or an existing lawsuit require attention.

A filed case needs its own disposition. New York CPLR rule 3217 on voluntary discontinuance contains procedures and a default rule concerning prejudice. The settlement should state what the parties intend to file and who will complete that work.

Delancey Street can discuss MCA settlement possibilities using the business’s agreements and financial records. Its debt settlement service is distinct from legal representation through independently licensed counsel. Confirm the engagement’s scope and fees before asking anyone to communicate an offer on the business’s behalf.

The initial conversation is useful when it produces a defined next task. That may be organizing a proposal, requesting missing records or obtaining legal review of terms the funder has already supplied.

State whether an opening proposal remains available until a specified date, and have counsel consider how that condition should be expressed in the correspondence.

4. An ACH notice requires a separate banking discussion

A notice sent to a funder does not establish what the bank will block, when a block begins, or how the account agreement treats the instruction. Those questions belong to the bank as well.

Sample for review: “Re: [agreement and account reference]. The business gives notice concerning the debit authorization identified as [authorization details]. Effective [date, subject to the applicable notice requirements], the requested change is [precise instruction]. Please confirm receipt and describe any further process you contend is required.”

The instruction must match the action the business intends and has authority to take. A prospective change is different from a claim that a previous debit lacked authorization.

For the bank, provide the relevant originator details and ask which business account process applies. State the facts behind any disputed entry. Nacha’s explanation of unauthorized and erroneous debit returns distinguishes authorization disputes from errors in an otherwise authorized payment and distinguishes applicable account and entry categories.

Stopping a withdrawal does not resolve the underlying agreement. Read the default provisions and consider reconciliation or a negotiated modification before deciding how to proceed. Resist the urge to characterize an authorized payment as unauthorized because the business can no longer afford it.

5. A termination demand needs a satisfied legal condition

In New York, UCC section 9-513 requires action on certain nonconsumer financing statements within 20 days after receipt of a signed demand when the statutory conditions are met. A partial settlement payment does not establish every condition.

Sample for counsel’s adaptation: “Re: financing statement [number], filed in [office], naming [debtor] and [secured party]. The business requests the termination statement required by the applicable law. The basis is [identify the satisfied statutory condition and supporting facts]. Attached are [supporting records]. Please send or file the termination statement as required and provide confirmation of the action taken.”

The demand should identify the correct filing and explain the basis without asserting that every unexpected lien is fraudulent. Keep proof of delivery and the response.

These letters work through precision. Each leaves a record that the next person can understand without reconstructing a conversation, which is often the most valuable thing correspondence can accomplish.