Delancey Street is not a law firm. This information is for general educational purposes only and is not legal or financial advice. For advice about your specific situation, consult an independent attorney or qualified financial professional.
MCA Reconciliation Support
Revenue down? We help organize your financial information and discuss potential payment adjustments with your funders. Any revised terms require their agreement.
The MCA Silent
Squeeze.
Your MCA was sized to a busy month. Then revenue dipped, but the daily ACH didn’t. Each week the funder takes a bigger share of a smaller deposit, until there’s nothing left for payroll, rent, or inventory.
A reconciliation provision may be relevant when revenue changes. Independent counsel can explain the agreement; we can help prepare financial information for discussion with the funder.
When revenue falls, existing payments may take up a larger share of deposits.
- Review current receipts.
- List existing payment schedules.
- Compare payments with operating costs.
Four stages.
Written plan.
We review your financial information and discuss potential payment adjustments with your funders. Starting the process does not change your payment obligations. Independent counsel handles legal questions directly with you.
Financial information review
We review bank deposits, receivables, and payment schedules to prepare a financial picture for your funders.
- Bank statements and receivables
- Current payment schedules
- Financial summary
Financial request preparation
We help organize a proposed payment adjustment and supporting financial information for discussion with each funder.
- Financial summary
- Proposed adjustment
- Communication record
Funder discussions
We discuss funder responses and potential revised terms with you. Independent counsel can assess legal questions and advise on any next steps.
- Funder updates
- Proposals for your review
- Independent counsel coordination when needed
Review proposed terms
If you and the funder agree to revised terms, those terms should be documented. You receive any agreed payment schedule and a record of the funder’s written response.
- Written funder response
- Any agreed payment schedule
- Questions for independent counsel
Every engagement has senior-advisor oversight for financial review and funder discussions. Independent counsel handles legal advice and representation directly with you. Delancey Street is not a law firm.
The right tool,
at the right time.
Reconciliation discussions and settlement discussions address different financial questions. Available options depend on your agreement, payment history, cash flow, and funder response.
A financial discussion, step by step
- Review your financial information.
- Discuss potential adjustments.
- Review the funder’s response.
- Decide whether to accept proposed terms.
A request does not guarantee approval or prevent default, collection activity, or legal action.
What could a proposed payment change look like for your cash flow?
Explore a hypothetical cash-flow scenario. This calculator does not predict a funder’s response or a contractual entitlement.
Illustration only: this model uses a 1.4 factor and 22-business-day month. Choose a hypothetical percentage adjustment to compare figures. It is not an offer, entitlement, or prediction of a funder’s response.
Still current. Already squeezed.
Active MCA position(s)
You have one or more outstanding merchant cash advance balances with daily or weekly remittances.
Still current on payments
You are current on payments and want to discuss potential options as cash flow changes.
Revenue declined since funding
Your actual receivables are running materially below the projection your funder used at origination.
Daily ACH consuming cash flow
Debits are eating an outsized share of deposits, and runway is shrinking by the week.
Questions, answered.
What is reconciliation in an MCA contract?
Do I have to be in default to discuss options?
How long does the process take?
What if my funder declines the request?
Will this affect my credit or future funding?
How is this different from MCA settlement?
MCA Reconciliation: Understanding the Financial Discussion
MCA Reconciliation: Understanding the Financial Discussion
When revenue changes, your existing payments may become harder to manage. We review your receivables and payment schedules and discuss potential adjustments with your funders. Independent counsel can explain any reconciliation provision in your agreement.
The financial picture
Agreements vary. A reconciliation discussion may involve comparing current receivables with the figures used when payments were set. We focus on the financial information and funder communication. Questions about classification, repayment duties, or legal remedies belong with independent counsel.
Organize a request
Request procedures differ by agreement. Gather your current statements and payment records. Independent counsel can explain any notice, timing, or contractual requirements; we can help organize the financial information for your funder. A request does not change existing obligations unless revised terms are agreed.
Keep clear records
Keep a clear record of financial documents, requests, and funder responses. Share legal questions about those communications with independent counsel.
Questions about your agreement
Questions about reconciliation can feel complicated when cash flow is tight. Start by organizing your financial information. Independent counsel can explain how your agreement, payment history, and proposed request may affect your legal position.
Our role
Our goal is to discuss payment terms that better reflect your current cash flow, subject to your agreement and funder response. Independent counsel handles legal questions.
- What does my agreement require?
- How could a request affect my obligations?
- What legal options are available if the funder declines?
We focus on preparing the financial picture and discussing potential terms with funders.
Send us your payment schedules and recent financial statements. We can discuss potential financial proposals for your funder. Independent counsel handles contract interpretation.
Get Help With Your Debt.
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