Zero-Balance Letter: Meaning in a Merchant Cash Advance
A zero-balance letter is the funder's written confirmation that you owe nothing more on the advance. Ask for it once the final payment or payoff clears. It should name the business, the contract, the date the balance reached zero and confirm that debits have stopped. Keep it with the payoff letter and the UCC-3 termination.
Where does it show up?
It's not in the contract. It comes after payoff, on the funder's letterhead or by email. Some funders send it automatically; many only on request.
How long should you keep the letter?
For good. Future funders, banks and mortgage underwriters ask for proof an old advance ended, and the letter is the cleanest proof. Keep it with the UCC termination and the final bank statement showing the last payment.
What does it look like in practice?
A new funder reviewing your file sees an old advance debit on statements from a few months ago and asks whether it's paid. The zero-balance letter answers that in one page.
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.