Acceleration: Meaning in a Merchant Cash Advance
Acceleration is a contract term that lets a funder demand the entire remaining balance at once after a default, instead of continuing to collect it through daily or weekly payments.
What does acceleration mean?
Normally, you deliver the purchased amount a little at a time. If you breach the contract in a serious way, such as closing the account, switching processors to avoid payments or giving false information, an acceleration clause lets the funder declare everything still owed due right away. Some contracts add default fees on top.
Why does acceleration matter to your business?
Acceleration turns a problem into a crisis. A business that's behind on a few payments suddenly faces a demand for the full balance, often followed by collection efforts or a lawsuit. Knowing what triggers acceleration in your contract helps you avoid the tripwires. Most of them are within your control: keep the funder informed, don't move sales and don't stack without permission.
What usually comes before acceleration?
Funders usually send a notice or a demand before accelerating, especially when a merchant is communicating. If you receive a default notice, respond quickly and in writing.
Why do funders include an acceleration clause?
From the funder's side, acceleration is protection against a merchant who stops cooperating. Once trust breaks down, collecting a little each day no longer works, so the contract gives it a way to claim everything at once. Understanding that logic helps you see why keeping communication open matters so much.
Where will you see it?
In the events of default and remedies sections of the merchant agreement.
Is this legal advice?
This is general information, not legal advice. How acceleration works depends on your contract's wording and your state's law.
Which terms are related to acceleration?
The full list is in the glossary. Owners ask about this in What's the difference between an MCA approval and an offer?.
A term on your offer you don't recognize?
Send us the line and we'll tell you what it means. Call 877-FUND-654 with any question. We call you back, usually the same business day, and we always talk with you before we shop your file.