MCA Reconciliation Request Letter: Template, Records and Contract Requirements

An MCA reconciliation request is a written demand for a reduction in your future payments due to a drop in sales, paired with evidence that the drop has occurred and that you’re entitled to the reduction. The relief is not automatic. You have to demand it. In the letter, cite the clause and the dates involved. Enclose any records the contract says to, and a calculation that follows the contract’s rule for how to figure relief. Send the letter by the notice method the contract specifies.

Your Contract Comes First

MCA reconciliation clauses are worded many ways. They often dictate the form and timing of the demand and the content of supporting evidence. “Reconciliation” clauses can be called various things, like “readjustment,” “true-up,” or “look-back.” But don’t rely on the title alone. Check the text to see if it covers withdrawals the MCA company already made, withdrawals they might make in future months, or both.

The contract should spell out which percentage applies to your receipts, and which receipts count as receipts. For instance, does the contract exclude certain sales or types of transactions from the calculation of your receipts for a given time? If so, find those, too. Bank deposits might be a poor proxy for all your sales. You might get deposits from transfers, new financing or refunds, and none of those is a sale.

Study the contract for what it says about the reconciliation process. Find any rules about how often you can ask for a review, and any deadline for when you have to do it by. Be sure to list every required statement, sale record or deposit report. Include copies of the contract showing the payment rate, and any amendments that changed it.

The contract might say the MCA “shall recalculate” or that you have the “right to request” that they recalculate. You can tell what a clause does by how it’s worded. Does the language mean the MCA company controls the process? Is the decision theirs to make, which you’re entitled to ask them to make? Or does the clause create a right that you can invoke or order the MCA company to act?

Check the “notice” clause for what you have to do. A notice might have to be sent by a certain method - email or portal, for instance - and to a specific recipient - sometimes the funder, sometimes the broker or servicer. When an MCA contract’s in several hands, each company might have a role. A phone call alone may not count as a notice, so check if there’s a written rule.

Review the contract for records you might have to enclose with your reconciliation letter. One guide suggests providing the last three months’ bank statements from every account your business uses to hold revenue, card processing statements, and a profit and loss report, plus the signed agreement. If you’ve asked for reconciliation in the past, a record of those requests and the MCA company’s replies should go with your current demand.

In an example, you got $37,500 funding for a $50,000 purchased amount, a 15% purchased percentage, with a daily withdrawal of $368, and in that month you had $40,000 in receipts. Fifteen percent is $6,000, but the 20 withdrawals took $7,360, leaving a gap of $1,360. This $1,360 difference isn’t proof that the funder owes you that money. What this shows is a gap between the contract payment rate and the payment taken. Whether you’re owed a refund, credit, or a lower payment depends on the contract and law. Calculate your own numbers.

Your Demand Letter

When you write your demand letter, put the business name at the top. Reference the date of the contract or its identifying number. State which section of the contract you’re citing, like “Section 9, Reconciliation.” Say that revenues have dropped. Say exactly what happened: “Total receipts from April 1 to April 30 were $X, but you took $Y during that time.” Give exact dates, and make sure the time periods match, like April 1-30 for receipts and April 1-30 for withdrawals.

Put the attachments together. Show the percentage, the qualifying receipts, the actual withdrawals, and the gap. Say if it’s for past collections, future payments, or both. And be specific about what you want: “We request an adjusted payment of $X.”

It can be good to ask for a written reply, plus the company’s calculation and when any change starts. Keep proof you sent the request and copies of everything, since verbal records can be weak.

It’s good to send a letter demanding reconciliation, but it doesn’t guarantee a refund, change the contract terms, stop payments or interrupt court deadlines. If you’re dealing with multiple MCAs, you may need a separate request for each. If a lawsuit or default notice arrives, consider talking with legal counsel.

Check what the “relief” actually does. A temporary lower payment might fix past overcollection or only future ones, add fees, defer amounts, have a release, or expire. It might or might not satisfy the contract. Before you agree to a lower payment, check when it starts and ends, and what your payment will be afterward. Save the written offer with your calculations.

If the funder says no to your reconciliation letter, or never replies, save a dated copy. They might say they need more time, want to see more documents, or disagree with your math. An attorney can assess your claims and defense to see what’s on track and what isn’t. A funder’s refusal doesn’t change the contract to a loan, or cancel the debt.

New York disclosure law treats contracts that have a true-up, a process that revises payment to a share of sales, as sales-based financing. In New York, courts can decide if a payment is loan-like or not by weighing several factors like reconciliation, a fixed term, and recourse if the merchant goes bankrupt. Courts look at the contract, not one part, to see what it does. One clause or email by itself usually doesn’t settle the deal. Having a reconciliation clause by itself doesn’t make the contract lawful.

The NY Attorney General said in January 2025 that Yellowstone Capital had misrepresented its reconciliation process. They said Yellowstone promised to adjust their daily withdrawals to match a percentage of the borrower’s revenue, but allegedly used fraudulent measures so the borrowers almost never qualified for a change. Don’t assume just because you asked, or because you got a reply, that you’ve gotten all the relief your contract promised.