Daily ACH Debit: Meaning in a Merchant Cash Advance
A daily ACH debit is the most common way a merchant cash advance is collected: a fixed amount taken electronically from your business checking account every business day until the purchased amount is delivered.
What does daily ACH debit mean?
When you sign an advance, you also sign an ACH authorization. That lets the funder take a set amount from your account through the banking network each business day. The amount is sized to match the share of sales you agreed to deliver, based on your average deposits. It doesn't come out on weekends or bank holidays, and it keeps going until the balance reaches zero or the payment is adjusted.
Why does daily ACH debit matter to your business?
A daily debit is small enough to feel manageable but constant enough to shape your cash flow. It comes out whether you had a strong Tuesday or a dead one. Owners who do well with daily debits keep a cushion in the account and know which days their big deposits land. If the debit bounces, returned payment fees stack up fast, so a thin account is the main risk to watch.
When should the daily amount change?
If your sales fall, the contract's reconciliation clause is the tool that brings the daily amount back in line with what the business actually takes in. Ask in writing, send the statements the funder wants and keep paying until the new amount is confirmed.
Where will you see it?
On your bank statement as a recurring line with the funder's name or code, and in the payment section of your contract, next to the specified percentage and the reconciliation terms.
Which terms are related to daily ACH debit?
The full list is in the glossary. Owners ask about this in Can I make extra payments on my merchant cash advance?.
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.