Daily ACH debits: what your MCA lender doesn't explain
When you sign an MCA agreement, the sales pitch goes something like this: "We take a small percentage of your daily sales, so when you have a slow day, you pay less." That sounds reasonable. It's also not how most MCAs actually work in practice.
What usually happens is a fixed daily ACH debit. Same amount, every business day, regardless of your revenue. The "percentage of sales" language is in the contract, but the lender has estimated your daily sales and set a fixed amount based on that estimate. Your actual sales on any given day don't change the debit.
How the daily amount is set
The lender looks at your bank statements from the past few months, estimates your average daily revenue, and calculates a percentage. That becomes your daily payment. If your average daily deposits were $3,000 and the holdback rate is 15%, your daily debit is $450.
But averages hide a lot. If your business does $5,000 on Monday and $1,200 on Thursday, the $450 debit feels very different on those two days. The lender doesn't adjust. The contract may say they can, but in practice, they rarely do without you fighting for it.
Reconciliation requests exist for a reason
Most MCA agreements include a reconciliation clause. This means you can request that the lender adjust your daily payment based on your actual sales, usually on a monthly or quarterly basis. If your revenue has dropped, the payment should drop proportionally.
Almost nobody uses this. Partly because most business owners don't know it's in the contract. Partly because the process is designed to be annoying — you have to provide updated bank statements, sometimes tax returns, and wait for the lender to "review" your request.
But if your daily sales have dropped 30% since you signed the agreement and your daily debit hasn't changed, you're paying a larger percentage of your revenue than what the contract specifies. That's worth the paperwork.
What to watch for in your bank feed
ACH debits from your MCA lender won't always be labeled clearly. The merchant name might be a parent company, a payment processor, or an abbreviation you don't recognize. If you see a recurring daily debit that started around the time you received the advance, that's probably it.
Watch for changes in the amount. If your daily debit was $450 for three months and suddenly jumps to $500 with no explanation, that's worth questioning. Also watch for double debits — some lenders debit once in the morning and once in the afternoon, and the afternoon debit isn't always the same amount as the morning one.
Count the debits per month. There are roughly 20 business days in a month. If you're seeing 22 or 23 debits, the lender may be pulling on days they shouldn't be. Some agreements specify Monday through Friday only. If debits show up on weekends or bank holidays, that's a problem.
Track everything from day one
The time to start tracking your MCA payments is the day the money hits your account. Not when you think something is wrong. Not when the balance doesn't seem to be going down. The first day.
Every debit, every date, every amount. Match it against your agreement terms. If you do this consistently, you'll catch discrepancies early — before they compound into thousands of dollars you have to fight to recover.