12 Questions That Test an MCA Sales Pitch Against the Agreement

A persuasive pitch survives by keeping the decisive term out of examination.

The twelve questions below test a financing proposal against the papers that would enforce it. They are editorial questions, not quotations, and no claim is made that intermediaries conceal the same thing. Each answer should come from the paper: the offer, the disclosures, and the contract proposed for signature.

The Counterparty and the Compensation

FTC guidance on endorsements and material connections explains that relationships affecting the credibility of an endorsement call for clear disclosure. The principle comes first: a paid recommendation deserves less trust than unpaid advice.

Question one: who will stand on the other side of the agreement? The calling brand may not be the entity named in the documents, so identify the funder, the servicer, and the person answering account questions after funding.

Question two: does compensation change with the provider, the amount, or the completion of the transaction? What the intermediary discloses, or withholds, about payment shapes the weight of every claim that follows. The commission schedule explains the recommendation better than the brochure, though no pitch volunteers that schedule.

Funds Disbursed and Funds Demanded

After the headline figure, the disbursement calculation tells what cleared.

Question three: what amount will the business receive for operations? A headline funding figure can differ from the deposit that clears. Request and retain the disbursement calculation, noting any portion directed to another obligation.

Question four: what total does the agreement require the business to remit? The California DFPI announcement of commercial financing disclosure requirements identifies comparison metrics for covered offers, including funding, finance cost, and payment information. Coverage and exemptions require separate review. An outlandish headline figure behaves like a lit window in an empty house: inviting, with no indication anyone is home.

You hear the payment and you miss the total. The documents correct the sequence only if someone reads them first.

Price Language and Collection Mechanics

Until the definition is fixed, the number means nothing. Question five: what does the quoted price figure describe? A factor, a fee, and an annualized measure cannot be compared as the same cost. Request the definition behind the number before weighing other offers.

Question six: how will money leave the account? Determine the frequency, the amount or percentage, and the mechanism used. A daily debit and a percentage drawn from actual receipts create different cash patterns. Set the proposed remittance beside the receipts cycle of the business. The same total creates a different burden when payments fall due before customers pay. The difference is extremely material in a thin month, and extremely easy to miss in a loud sales call.

The pitch describes access, while the file on the table describes what leaves the account each morning.

Rarely does a sales conversation linger on the collection clause, which debits on schedule while no assurance given outside it changes the exposure (the files reviewed here were few, and none involved a bank side letter). Any assurance about flexibility, even casually offered, binds no one until the clause says it. That much is certain, and little else.

Revenue Decline and the Signed Guaranty

A fall in receipts tests the language both sides signed.

Question seven: what provision addresses a fall in receipts? Locate the reconciliation language, with its request process and required records. In LG Funding, LLC v. United Senior Properties of Olathe, LLC, reconciliation stood among the factors the court weighed on absolute repayment. The decision does not give every agreement the same adjustment right. Counsel should test the clause in the offer at hand.

Question eight: what individual obligation do the documents request? Reconciliation leads, as these files tend to do, to the signature page. Read the guaranty for its scope, its trigger, and the identity of its signer. A reference to unsecured funding answers nothing about personal liability. The security agreement with the individual undertaking requires separate examination, since one may encumber assets the other leaves unmentioned. Counsel will trust the paper over any recollection of the pitch.

If the company expects thinner receipts during a scheduled closure, ask how the contract handles that foreseeable change. The response should name the mechanism, the documents, and the handler. A statement that the funder understands the business is not an adjustment provision.

Give counsel the signature page with the surrounding clauses. A screenshot of the final paragraph may omit the definitions pages away. Dated versions matter more than clean copies in a dispute. Preserve and file every written explanation received. A material representation that influenced the decision belongs with the file.

Renewal and Default Provisions

Renewal deserves the coldest reading in the file.

Question nine: does a renewal deliver new working capital or apply part of the new funding to an existing balance (a distinction the renewal presentation, drafted in order to emphasize the deposit over the advertised renewal savings, may leave unclear)? Request the applied amount and the net funds reaching the business. Suppose renewal money arrives in March, and by May the owner cannot say what it retired.

Question ten: which events does the contract call default, and what consequences does it assert against the business? Counsel should assess the provisions where their effect matters, though local counsel will know more than any article states. No owner should assume every stated consequence proves enforceable. Whether a court would read the clause the same way remains an open question. The docket number, if any, belongs in the file.

Missing Documents and the Decision to Wait

Before any comparison begins, the owner should fix the parties and the payments in writing.

The missing paper decides more than the offered paper.

Question eleven: which documents are missing from the table? Simply require the complete agreement, the guaranty, and every rider to the required disclosure before the business commits. Question twelve: what does waiting cost? A documented expiration differs from pressure to decide before reading. A funding deadline should not keep the business from understanding the obligation. Disclosure packets travel slowly. Everyone in the file knows it.

Where an existing advance drives the search for new financing, debt resolution may address the substance of the problem. Delancey Street offers an initial review of MCA settlement through its business debt settlement service, a commercial role distinct from legal representation through independently licensed counsel. Confirm and record scope and fees before engagement.

Resist the urge to decide from the pitch alone. Ensure the file holds the disclosure, the offer, and the final contract with its exhibits. Ensure no statement about cost, timing, or the liability no one named rests on memory alone. Proposals grow more useful as the unexplained parts grow fewer. That habit outlasts any single offer.