MCA Reconciliation Request Letter: Template, Records and Contract Requirements

A reconciliation clause becomes useful through the procedure it provides, and a letter cannot replace that procedure with one the business would prefer. The owner needs the agreement before the template.

Lower revenue may explain why the scheduled remittance no longer fits the business. Whether the funder must adjust it, refund an amount or provide another form of reconciliation requires examination of the particular clause and the facts. The word “reconciliation” alone does not answer those questions.

A sound request puts the contractual basis and supporting records in the same place. It also preserves what the funder does in response, because the handling of the request can matter beyond the immediate payment calculation.

1. Locate the operative provision and any modification

Read the reconciliation clause alongside the payment authorization, definitions and notice section. A defined term such as receipts may not correspond to every deposit appearing in the bank account.

Check whether a later modification changed the process. A reduced payment agreed by email or in another document may need to be considered with the original agreement. Give counsel the complete sequence rather than the page containing the most favorable phrase.

Identify who receives the request and which records the agreement requires. If the provision specifies a period or method, address it in the submission. Do not invent a universal monthly deadline or assume that a telephone conversation fulfills a written notice requirement.

The owner should also determine which agreement is involved. With several advances, a request directed at one funder does not automatically change the obligations owed to the others.

2. Match receipts and remittances for the same period

The calculation needs a defined period. Compare the receipts relevant under the contract with the remittances taken during that period, and explain how the figures were assembled.

Bank statements may contain transfers, owner contributions or other deposits requiring separate treatment under the agreement’s definitions. A deposit total is not necessarily the same as the contract’s measure of receipts. The records should permit the recipient to understand the distinction.

Use the supporting documents the clause calls for. Depending on its language, those may include account statements, processor reports or other business records. Do not represent a preferred document package as a requirement imposed on every MCA.

A worksheet can identify dates and figures without making a legal conclusion. Its purpose is to show the calculation the business proposes and the records supporting each entry.

If information is missing, say what remains outstanding. A request built on incomplete figures should not present an estimate as a final accounting. The owner can identify the available records and ask how the recipient proposes to address the gap.

The funder’s calculation deserves the same transparency. Request the period used, the applicable contractual measure and the credits included. A revised debit amount without an explanation may leave the underlying disagreement unresolved.

3. Use the template to invoke a clause rather than announce a result

Sample for adaptation: “Re: [business legal name], agreement dated [date], reference [number]. Under section [number] of the agreement, the business requests reconciliation for [identified period]. The attached records show [relevant receipts figure] and remittances of [amount], calculated as described in the attached worksheet.”

Continue: “Please evaluate this request under the agreement and provide the resulting calculation. The requested adjustment is [describe the remedy supported by the clause]. If additional records are required, please identify them and the contractual basis for the request. Please provide your response to [authorized contact] using [applicable notice method].”

The proposed remedy should match the provision. Do not demand a refund where the clause addresses only prospective adjustment without first obtaining legal review. Likewise, do not assume that an adjustment request changes the next debit before the recipient confirms the result or counsel assesses the obligation.

Add the date and the sender’s capacity. Retain a copy of the submitted worksheet and every attachment. If the agreement requires a signed request, ensure the final version satisfies that requirement.

The template intentionally does not promise that a response is due in a fixed number of days. Use the contract’s requirement where one exists; otherwise distinguish a requested response date from a legal deadline.

A forceful sentence cannot repair missing evidence. The stronger submission usually explains the numbers and asks the recipient to apply the language it already uses.

4. Understand what the case law establishes

In LG Funding, LLC v. United Senior Properties of Olathe, LLC, the appellate court considered reconciliation among the features relevant to whether repayment was absolute. Duration and bankruptcy recourse also formed part of that analysis.

The decision does not establish that every advance is unlawful or every reconciliation request must be granted. Counsel should compare the agreement and performance with the authority that governs the dispute.

The request and response can help establish how the provision operates in practice. Preserve both, including any explanation for a refusal or demand for more records.

5. Keep the payment decision separate from the request

A request for reconciliation is not itself a bank instruction. If the business is considering stopping debits, review the authorization and default provisions before taking that separate step.

Nacha’s discussion of debit return reasons distinguishes errors in authorized entries from absent authorization and explains relevant account and entry categories. An unaffordable payment should not be described to the bank as unauthorized merely because reconciliation remains disputed.

The business also needs a plan if the recipient rejects the proposed calculation. That may involve further documentation, a negotiated modification or legal review. There is no universal sequence requiring the funder to accept one of those alternatives.

Keep the cash forecast current while the request is pending. The owner should know what the existing remittance permits the business to pay and how a proposed adjustment would change that position.

6. Use the record to evaluate the next resolution

Delancey Street offers a confidential initial discussion of MCA settlement possibilities through its business debt settlement service. Legal representation is separate and handled through independently licensed counsel.

The owner can bring the agreement, reconciliation submission and response to that discussion. Confirm whether the proposed engagement addresses negotiation and which questions require counsel’s analysis. Fees and scope should be established before work begins.

A reconciliation request may resolve a calculation or expose a larger dispute. Either result gives the business something more useful than a form that promises to force compliance: a documented basis for the next decision.