Requesting a payment pause from your MCA funder

Short answer: You can ask. Most funders will say no. Some will say yes, but only on their terms, and the terms are almost always worse than what you had. A payment pause from an MCA funder is not the same thing as a forbearance from a bank. There’s no federal framework, no standard process, no right to one. It’s a negotiation, and you’re negotiating from a weak position the moment you pick up the phone.

If you’re behind, or about to be behind, read this before you call them.

What a “pause” actually means in MCA world

Traditional lenders have forbearance. Deferment. Hardship programs. All of that is built on top of federal consumer protection laws, and banking regulations, that MCAs don’t fall under. When an MCA funder says they’ll “pause” you, they mean one of a few things, and you need to know which one before you agree to anything:

• A true pause. Daily ACH stops for a defined window, usually 3-7 days, sometimes 14. Rare. Almost never offered unless you’ve been a strong merchant and this is your first ask.
• A reduction. The daily debit drops from, say, $850 to $400. The balance doesn’t shrink. The term extends. You’re paying longer, and in most cases, you’re paying more by the end.
• A reclass to weekly. They move you from daily to weekly ACH. Sounds like relief. It’s not. The weekly number is usually the sum of the daily debits, and now you’re just hit with one larger number instead of five smaller ones.
• A “modification” with new paperwork. This is the dangerous one. They’ll send you an addendum. You’ll sign it. Buried in it is almost always a new confession of judgment(in states that still allow them), an expanded personal guarantee, or a waiver of defenses you had under the original contract. Do not sign a modification without having someone read it first.

When to ask, and when not to

There’s a window where asking works. It closes fast.

Ask before you miss a payment. Not after. The moment that first ACH bounces, your leverage collapses. The funder’s risk department sees the NSF, flags the account, and now the conversation isn’t about a pause – it’s about collections. The rep you were friendly with last month doesn’t make the call anymore.

Ask when you have a specific reason, and a specific ask. “Business is slow” is not a reason. “We lost our largest customer last Tuesday, here’s the email they sent, and I need 10 business days to replace the revenue” is a reason. Funders hear vague hardship stories all day. They don’t hear specifics, because most merchants calling them don’t have specifics. Be the one who does.

Don’t ask if you’ve already stacked. If you took a second or third MCA, and now you’re calling the first position for a pause, you’ve already told them what’s happening. Stacking is default under virtually every MCA agreement, and your call is going to trigger a review, not relief.

What to actually say on the call

Keep it short. MCA reps are trained to let you talk, because the more you talk, the more you say something they can use. Give them the facts, the ask, and the return-to-normal date. That’s it.

A version that works:

“I’m calling because we had [specific event] on [date]. I’ve been on time for [X months]. I’m asking for a [X day] pause, and I’ll resume daily ACH on [specific date]. I can send documentation today.”

What doesn’t work:

• Long explanations of why the business is struggling
• Promises about future growth
• Mentioning other funders, other debts, other MCAs
• Telling them you’re “considering your options”(they hear this as a threat to default, and they’ll accelerate)
• Asking what they can do for you — they’ll tell you, and you won’t like it

Get it in writing. Every single time.

A verbal agreement with an MCA funder is worth nothing. I’ve seen this a hundred times. Merchant calls, rep says “yeah, we’ll pause you for a week,” merchant feels relieved, ACH hits anyway three days later, bank account goes negative, and now the merchant is in default under the original terms because, legally, nothing changed.

Before you hang up, ask for an email confirming:

• The exact dates of the pause
• The resume date, and resume amount
• That no default fees will be assessed during the pause
• That the UCC, and any personal guarantee language, is not being modified

If they won’t put it in writing, there is no agreement. Act accordingly.

What they’ll ask for in return

This is where most business owners get caught. The pause isn’t free. The funder will almost always ask for something, and the something is usually one of these:

• Updated bank statements (last 3-4 months)
• A new personal guarantee, or an expanded one that pulls in a spouse or a second owner
• A confession of judgment if your original contract didn’t have one
• Access to your merchant processor login, or a new lockbox arrangement
• A higher daily once the pause ends, to “make up” for the paused days

Every one of these makes your position worse. Some of them(COJ, expanded PG) make your position dramatically worse. A 5 day pause is not worth signing a confession of judgment that lets them walk into court and get a judgment against you personally without a trial.

Know what you’re trading before you trade it.

If they say no

They will, often. Here’s what not to do when they say no:

Don’t default out of frustration. A voluntary default – blocking the ACH, closing the account, switching processors – is still a default, and it’s the fastest way to get sued. The calls get worse, not better. The balance accelerates. The UCC notices go out.

Don’t stack. Taking a second MCA to make payments on the first is how merchants go from owing $80,000 to owing $400,000 in six months. Every funder knows this playbook. They price the second and third positions assuming you’ll default, and the daily debits are structured to drain the account faster than the revenue can refill it.

Do consider your real options, in order:

1. Negotiate a settlement. Most MCAs will settle for 40-70 cents on the dollar once they believe collection is uncertain. This requires a different conversation, and usually a different person making the call.
2. Restructure across all positions. If you have multiple MCAs, a consolidated workout is almost always better than trying to manage each one separately.
3. Talk to an attorney who actually does this. Not your cousin who does real estate closings. Someone who litigates MCA cases, and knows the funders by name.

The thing nobody tells you

Funders have internal tiers. The person answering the phone on the 800 number cannot approve a pause. They can deny one. They can escalate one. They cannot approve one. If you’re getting a “no” from the first person you talk to, that’s not the final answer – that’s the front desk. Ask, politely, to speak with the workout department, or the risk department, or whoever handles modifications. Use those words. Most merchants don’t know to ask, and they hang up thinking the answer is no when the answer was actually “not from this person.”

Be the merchant who knows to ask for the second conversation. It’s often the one that matters.