Should My Accountant Review My MCA Contract?
It's a good idea, especially on a larger advance or a consolidation. Your accountant can check whether the payment fits your cash flow and how to record the advance, while legal terms like the guarantee and default sections are better read by an attorney.
What can an accountant check in an MCA contract?
Accountants see the whole financial picture. They know your margins, your seasonality, your tax obligations and your other debts. That makes them the right person to answer the most important question about any advance: can the business carry this payment comfortably while still paying everything else? They can also help you:
- Compare offers on total cost and net funding.
- Plan how to book the advance and the payments.
- Spot conflicts with loans or leases that restrict new financing.
- Think through whether the advance's purpose will pay for itself.
What should an attorney review instead?
Contract terms like the personal guarantee, events of default, confession of judgment, governing law and arbitration are legal questions. If those sections worry you, a business attorney should read them. Your accountant will often flag them, but interpreting them is legal work.
How do you make the review fast?
Send your accountant the full offer, not just the summary. Include the fee schedule and the payment section. Ask a specific question, like whether the business can carry this payment through the slow season, rather than a general request to look it over. A focused question gets a faster, more useful answer.
When should the review happen?
Offers don't last forever, but a day for your accountant to review is almost always fine. If a funder pressures you to sign within minutes and won't wait for your accountant, treat that pressure as a warning sign.
What if you don't have an accountant?
Plenty of owners don't have one. We'll walk you through the numbers on the call, show the payment against your recent statements and tell you honestly if the payment looks tight.
How should an MCA be recorded in your books?
Accountants handle MCAs differently depending on how the contract is structured and how your books are kept. Some record the advance as a liability, others treat it in line with the sale of receivables. The right approach for your business is a question for your accountant, and it's worth settling before the first payment so the monthly books stay clean.
Is the cost of an MCA tax deductible?
Ask your accountant how the cost of the advance affects your taxes. The answer depends on how it's booked and on your tax situation, and it's one more reason to bring them in early rather than at year end.
How can Afterfirst help with this?
Forward your offer to your accountant and copy info@afterfirstmca.com. We'll answer any question your accountant has about how the numbers were built, and we'll keep the offer on hold while they review it.
What else do owners ask about this?
- Can my bookkeeper or partner handle the MCA process for me?
- Can I choose my MCA payment amount?
- What does an arbitration clause in an MCA mean?
More short answers on this topic are on the offers and contracts FAQ, and the MCA offer comparison runs the numbers for your own file.
Have a question we didn't answer?
Ask us on the call. 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.