Payoff Letter: Meaning in a Merchant Cash Advance
A payoff letter is the funder's written statement of exactly how much it takes to close your advance, good through a stated day, with where to send the money. Ask for one before you pay off, consolidate or renew. It should show any discount, when the debit stops, and what paperwork follows. Don't send a payoff based on a phone quote.
Where does it show up?
It's requested from the funder, not found in the contract. Consolidation and renewal offers usually need one from each funder being paid off.
What should you check before you send the payoff?
Check the good-through date, the wire or ACH instructions, and that the amount matches your own count of payments made. Call the funder at a number you already have to confirm the instructions, since fake payoff instructions are a known fraud.
What does it look like in practice?
A consolidation offer needs to pay off two advances. Each funder sends a payoff letter good for a few days. The new funder pays from those letters, and each old funder sends a zero-balance letter after.
Which owner question goes with this term?
How do I get a payoff letter for an MCA? Answers to the questions owners ask about this term, with what to ask the funder.
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.