Shopify and DTC Brands: 6 Paths for Unwinding MCA and Revenue Based Debt

The percentage taken from daily sales describes collection, while the contract behind the percentage decides the obligation.

A Shopify brand carrying platform debt beside outside advances should identify each product and counterparty before choosing among the paths below, since each remittance answers to a different contract. A loan, an MCA, and whatever revenue agreement the brand signed beside them unwind on different terms, and the brand pays for confusing them.

Loan Completion on Verified Terms

Six months after funding, the first minimum comes due whether sales cooperated or not, so the existing agreement should determine the completion amount. Shopify United States Capital guidance identifies secured loans issued by WebBank and distinguishes fixed fee from monthly fee structures.

Percentage based collections continue toward a total payment amount with minimum milestones and a maximum term of 18 months. The daily collection falls when sales fall. The total owed does not. Rarely does a dashboard show which fee structure produced the balance. Which fee structure governs? The agreement answers, not the dashboard.

For agreements accepted on or after March 9, 2026, with Texas agreements changing from September 1, 2025, the collection method follows different rules after a failed bank debit. A general statement about early payment under one fee structure should not be applied to another. I am less certain about the monthly fee interaction than this section might suggest.

Obtain the current balance with the transaction history before directing any final transfer, and protect and preserve that history beside the agreement. An outside MCA needs its own payoff terms. Resist the urge to direct the final transfer before the history is matched.

Adjustment Requests Under the Agreement

A reconciliation provision can supply a process for adjusting collections to receipts. The month the request covers is decided by the records behind it, so locate the required records with the period used for the calculation. Counsel should review the records, test the calculation, and prepare a request that states the period, the receipts, and the contractual basis.

The New York decision in LG Funding, LLC v. United Senior Properties of Olathe, LLC weighs reconciliation with other features when assessing whether repayment is absolute. The decision converts no financing dispute into a successful challenge by itself.

The agreement definition of covered sales (which counsel for funders will insist the merchant understood at signing) may differ from the amount the owner regards as operating revenue. Distinguish gross orders, refunds, and whatever cash reached the account. The clause sits in the agreement like a fire escape plan in a building with no stairs: drawn with care, difficult to use.

Submit accurate information under the true up procedure the agreement describes. A declined request supplies an extremely narrow basis for predicting the result under another agreement. Any discussion of the calculation with the provider, even briefly, should follow counsel review.

A platform loan carries its own repayment requirements rather than an MCA reconciliation provision. The WebBank agreement from the first section answers most of these questions.

Negotiated Terms and Settlement Review

Begin every proposal with an identified source of payment, which for a product brand means accounting for inventory, fulfillment, returns, and obligations tied to orders already accepted. The complication is the launch calendar, because projected sales from unreleased products keep entering the forecast as committed cash, and by the time the spreadsheet balances, the offer depends on customers the brand has not yet found.

Separate funds available now from projected sales. This is not forgiveness. It is a payment the business can perform. The proposed arrangement should name the balance resolved, the payment dates, and whatever conditions govern release, since a lower debit by itself changes nothing about the remaining obligation.

Delancey Street can review the MCA portion through a merchant cash advance settlement review, beginning with a free and confidential discussion. Confirm whether the particular account falls inside the engagement. You sign the remittance authorization and then you learn what it authorized.

The company is a settlement provider, not a law firm. Independently licensed counsel handles legal questions with disputes concerning the contract. Factor pricing is structured in order to make renewal look cheaper than exit. The engagement should ensure fulfillment funds stay out of the settlement account. No provider can ensure acceptance, and diverting fulfillment funds is extremely hazardous.

Where several obligations are involved, maintain a separate ledger for each counterparty. I have yet to see a blended forecast survive contact with the fulfillment invoices. Most providers prefer the blended forecast. It flatters the offer they are about to decline.

Replacement Financing and Formal Alternatives

The replacement offer deserves a reading that starts with the obligations it will retire. New money that leaves the earlier advance active may increase the commitments against future receipts. There is a particular quiet in the accounts when the percentage resumes after a pause.

Compare total payments with the timing of those payments. Collateral with individual undertakings deserves review before the owner accepts the offer. Obtain the required payoff and release documents from the existing counterparty. The new lender expects the old account to close.

New debt rarely cures old debt.

If court papers arrive, the response follows its own timetable. The response becomes part of the record used against the merchant, and what the response admits, or omits, shapes the months after filing.

Releases, Filings, and the Final Ledger

New York termination rules address financing statement termination under stated conditions, and no payment by itself removes a filing without the required procedure and authority. Each remittance during negotiation should appear in the final accounting.

The closing documents decide what survives, so the resolution should assign responsibility for releases with any required filing actions. We review and analyze the payoff receipt beside the filing confirmation before the file closes, a matching that takes weeks more often than days. The objective is to ensure no obligation survives through an unattended document.

Simply retain the executed terms with evidence of performance beside the final ledger. A brand that closes the file without matching payments to releases resembles a warehouse that counts boxes without opening them. Both trust the label. Most founders do not call until the percentage has eaten the margin for a quarter. I understand the delay. Resolving revenue based debt begins by refusing to treat every percentage payment as the same obligation. Consultation is where this conversation begins, and the final ledger carries the discussion.