Cannot Make Tomorrow's MCA Payment? 5 Things to Do Today

It goes without saying, but you want to contact the provider before they try to debit your bank account again tomorrow morning. If your company is unable to make the required repayment amount, you want to be the first to call. Waiting until after the debit has failed to communicate is the worst thing you can do. Today:

• email the funder’s servicing team and ask for reconciliation,
• work out what you can realistically afford to pay each day,
• don’t block the ACH,
• don’t take a new MCA,
• and line up an attorney if it looks serious.

The reason why today is so important is that, on day one before the ACH fails, every option is still open. You can request reconciliation, restructure your payment terms, consolidate the debt, refinance it, anything. By day thirty of doing nothing, the picture is very different, because by then the funder has usually escalated the UCC-1, frozen the merchant account, or begun the lawsuit. The funder isn’t your enemy on day one. They want to get paid, which means it’s in their interest to work with you. Written requests for reconciliation, honest conversations about revenue, and early contact will serve you better than radio silence nearly every time.

Staying quiet doesn’t buy you anything. The funder finds out the moment the ACH bounces anyway, and by then you’ve lost your credibility, your shot at a reconciliation, and probably the file has gone to their collections department. One early email, even a bad-news one, changes how the whole thing plays out.

Ask for Reconciliation

First, the email: Just send an email to your funder’s servicing team, attach the last four weeks of bank statements, and ask for reconciliation. Reconciliation is part of almost every legitimate MCA contract. Good funders will take a new statement and recalculate the ACH to reflect how the business is actually performing. Funders are much likelier to say yes to this before they’ve hit several failed debits than they are after. If possible, try to avoid only communicating over the phone, because a written paper-trail of every interaction is better than an ‘I said he said she said they said I said’ situation.

Work out what you can really pay daily, as what you think might be possible and what you can consistently afford are two very different numbers. Sit down before your call with the funder and honestly put down every deposit and every outflow from your account over the past 30 days. The sustainable amount to debit is probably 8-12% of daily deposits. Ask for that number as the total daily ACH amount.

Although it might be tempting, do not block the ACH through your bank. Almost every MCA contract calls that an automatic breach, and it turns your file from “late” to “breach of the purchase agreement” in one move. That is why so many funders will immediately escalate the UCC-1 filing, freeze the merchant account, or begin litigation in the most aggressive legal environments. Blocking the ACH almost never does what you want it to do, and usually it only escalates the situation faster.

Don’t take a new MCA to make the payments on an older one. The single most common pattern in the files that end in judgment is a stack of MCAs. Every position in the stack adds a daily debit before it adds any use that generates revenue, and within 60-90 days the compounded debit alone exceeds the cash flow of the business.

Escalate This Request in Writing

If the funder refuses to reconcile, escalate this request in writing and cite the reconciliation clause by its paragraph number. Copy the funder’s compliance address too (if one is listed in your contract). If your business is in a state that requires commercial finance disclosures (California, New York, Virginia, Utah, Georgia, Connecticut, Florida, Kansas) consider contacting the state regulator. Or if you have the budget for one, an attorney can send a formal demand letter at this point that might change the tone.

MCA Defense Work

If you’re served with a lawsuit, or if you get threats like a confession of judgment, get a real attorney who handles MCA defense work in your state or jurisdiction. The state bar referral service is a good place to start. Ask how many MCA cases they actually handled last year. Often, settlements before judgment are around 50-80% of the remaining balance due, while they can be very small discounts after the judgment enters.

Confession of judgment threats aren’t always as strong as they sound. Since Aug 30, 2019, New York no longer lets COJs be filed against out-of-state people or businesses with no place of business in New York. In Texas, since Sept 1, 2025, a sales-based financing contract with a confession of judgment clause is void and unenforceable. Ask your lawyer whether either one applies to you.

If the stack itself is simply unsupportable, then talk to an attorney about Subchapter V of Chapter 11 bankruptcy for small businesses to restructure unsupportable debt. The automatic stay can halt the collection process including MCA ACH debits. It’s a real tool, though not usually the first one, and it takes preparation. If you reach out 60 days before the bank levy you have options; if you reach out the day before you usually don’t. Note that the debt limit for Subchapter V is now $3,424,000 for cases filed on or after June 21, 2024, which is worth asking about.

You don’t have to work all of this out alone. The SBA and its resource partners, including Small Business Development Centers, offer free or low-cost business counseling to borrowers. Use the SBA’s local assistance tool to find a resource partner near you by ZIP code.

None of this has to happen all at once. But the ACH runs tomorrow, and the one thing to do today is sending that email to the funder.