Your Right to Request Payment Adjustments
Most MCA contracts include a reconciliation provision giving you the right to request payment adjustment when revenue decreases. This is a contractual right, not a favor from the funder. Exercising it is one of the most important and underutilized tools available to MCA borrowers.
How to Submit a Reconciliation Request
- Review your contract. Find the reconciliation or true-up clause. Note the specific process, required documentation, and timeframes.
- Prepare documentation. Gather 3 to 6 months of bank statements showing the revenue decline. Calculate the percentage decrease from when the MCA was funded.
- Submit in writing. Send via email and certified mail. Include the specific contract provision, revenue documentation, proposed adjusted payment amount, and a request for response within the contractual timeframe.
- Follow up. If no response within the specified period, send a follow-up documenting their failure to comply.
What Happens If the Funder Refuses
Many funders ignore or reject reconciliation requests because reduced payments extend repayment and reduce returns. If the funder refuses, their refusal may constitute breach of contract. This is a powerful defense if the situation escalates to litigation. Document every refusal carefully.
How Much Can Payments Be Reduced?
The reduction should be proportional to revenue decline. If revenue decreased 30 percent, payments should decrease approximately 30 percent. Some contracts include a minimum payment floor or cap the number of annual requests. Your attorney can advise on specific limits.
Strategic Timing
Request reconciliation as soon as you see sustained revenue decline. Do not wait until you are about to default. A proactive request demonstrates good faith, preserves contractual rights, and may prevent the default that triggers enforcement actions.