Quick answer: Many MCA structures use automatic ACH withdrawals. Amount and frequency should be clearly stated.
Key takeaways
- MCA structures vary by provider and contract.
- Revenue, bank activity and existing obligations matter.
- Compare total payback and payment timing, not just approval amount.
- Approval, pricing and funding speed are not guaranteed.
Daily or weekly ACH
Many MCA structures use automatic ACH withdrawals. Amount and frequency should be clearly stated.
Percentage-of-sales remittance
Some structures use a percentage of card sales or receivables so remittance can move with revenue.
Reconciliation
Some contracts allow a process to compare remittance with actual receivables and adjust payment under stated conditions.
Cash-flow planning
Model proposed payments against slower normal weeks, not only average months.
Before signing
Confirm amount funded, total payback, remittance method, frequency, reconciliation rights, default triggers and payoff process.
Questions to ask before moving forward
- What is the exact net amount deposited?
- What is the exact total payback?
- How often is money withdrawn?
- What happens if revenue falls?
- What are payoff, UCC and default terms?
Source standards: See our Sources & Standards page. Actual provider agreements and current law control individual transactions.