MCA Reconciliation: How to Request a Lower Payment
MCA reconciliation is a request to bring a fixed daily or weekly debit back in line with the share of sales your contract names. You send recent statements, and the funder resets the debit to match.
What is MCA reconciliation?
The rule is simple: the contract names a share of sales, the debit is an estimate of that share, and reconciliation trues the estimate up to real deposits. If your agreement says the funder buys $10,000 of every $100,000 in sales, a month of $60,000 should mean about $6,000 collected, not $10,000.
Many agreements fix the debit at signing to keep collection simple. The reconciliation clause is what lets you correct it when sales move.
Think of the debit as a running guess. When your sales match the guess, nothing needs fixing. When they drift far enough below it, you pay more than the contract's share each day, and reconciliation is the way to stop that gap from building. Not every agreement includes this right, and some describe it only loosely, so the wording matters as much as the debit amount itself.
How does reconciliation change a payment in dollars?
Take a salon with $105,000 in monthly sales and an advance with a $65,000 payback. Its contract sets the funder's share at $10,000 of every $100,000 in sales, so the funder fixes the debit at $500 per business day, about $10,500 a month. While sales hold, the debit and the share match.
| Case | Monthly sales | Agreed share | Debit per business day |
|---|---|---|---|
| Normal month | $105,000 | $10,500 | $500 |
| Sales drop 40%, no request | $63,000 | $6,300 | still $500 |
| Sales drop 40%, after reconciliation | $63,000 | $6,300 | $300 |
Then sales fall 40%, to $63,000. The agreed share is now $6,300 a month, but the fixed debit keeps taking about $10,500. After a reconciliation request with statements, the debit drops to about $300 a day. The $65,000 payback stays the same; it simply takes longer to reach. Sample figures only, built to show the math.
Over a single 21-day month, the gap is about $4,200: roughly $10,500 taken against $6,300 agreed. Two months without a request means about $8,400 leaving the account that the contract never called for. That cash would otherwise cover payroll, rent or inventory during the very stretch when sales are down. The longer a slow period runs, the more a prompt request is worth.
How do you request reconciliation?
- Find the reconciliation clause and note how to send a request and what window it covers.
- Download bank statements for that window, plus this month's activity so far.
- Write a short request: your contract number, the window, total deposits, and the debit you believe matches the agreed share.
- Send it the way the contract names, and keep a dated copy.
- Follow up in writing if the funder hasn't answered within the time the contract gives.
Keep making scheduled payments while you wait unless the funder confirms a change in writing. A missed debit can trigger fees or a default clause, which helps nobody.
A clean request is easier to approve. Total each month's deposits, set aside transfers between your own accounts, and point to any one-time items such as a refund or a large catering order. A funder comparing your numbers against the agreed share should be able to check your math in a few minutes. If you're unsure how to read the statements, our guide to the daily holdback shows how the share is set.
What doesn't reconciliation change?
Owners often expect reconciliation to cut what they owe. It doesn't. The payback was set at signing, so the $65,000 in the example stays $65,000. Reconciliation only resizes each debit so it tracks real sales, which stretches the schedule out.
It can also work the other way. If sales rise well above the level the debit assumed, some contracts let the funder raise the debit to match. Read both directions before you file a request.
Some agreements also let the funder ask for an updated set of statements at any time. That's worth knowing, because a review you start and a review they start can end in different places.
What should the reconciliation clause say?
A useful clause names four things: who can start a request, how often, which records are needed, and how soon a new debit applies. Look for a clear address or portal for requests and a set number of business days for the funder to respond.
Watch for wording that leaves the decision entirely to the funder, or that limits requests to rare dates. If the clause is thin or missing, ask about it before you sign, not after a slow month arrives.
What should you ask about reconciliation?
- Where and how do I send a reconciliation request?
- How often can I ask?
- Which statements does the funder need?
- How many business days until a new debit takes effect?
- Does the funder refund any overpayment from the window?
- Can the debit go up if sales rise?
- What happens if a payment is missed while a request is open?
Get each answer in writing. If sales have already slowed, our answer on what happens when sales slow down covers the next steps.
Takeaway
MCA reconciliation brings a fixed debit back in line with the share of sales your contract names, without changing what you owe. In the salon example, a 40% slide in sales should drop the debit from $500 to about $300 a day.
Read the clause before you sign, keep statements ready, and send requests in writing. To compare offers on their reconciliation terms, send one application or call (877) 386-3654.
Reconciliation questions
What documents are needed for MCA reconciliation?
Bank statements for the window you want reviewed, plus this month's activity so far. Some funders also ask for processor statements.
Does reconciliation reduce the total amount owed?
No. It resizes each debit to match the agreed share of sales. The payback in the contract stays the same.
Can reconciliation increase my payment?
Some contracts allow it when sales rise above the level the debit assumed. Check the clause for both directions.
Should I stop paying while a request is open?
No. Keep paying unless the funder confirms a change in writing, since a missed debit can trigger fees or a default.
What if my contract has no reconciliation clause?
You can still ask the funder for a payment change, but it has no duty to agree. Get any new terms in writing.
Sources
Afterfirst is not a funder; all offers are subject to funder underwriting.
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