An MCA payment schedule is the funder's commitment in writing of exactly when and how much will be debited from the merchant's bank account through the life of the advance. Reputable funders provide this schedule with the offer letter; predatory funders avoid producing it because the math reveals just how aggressive the daily burden actually is.
The four common schedule structures.
1. Flat daily Mon-Fri (most common, ~85% of 2026 MCA volume). - Fixed dollar amount every business day. - Excludes weekends + federal holidays. - Total debits: ~189 business days in a 9-month term (factoring 10 holidays). - Example: $100K advance at 1.30 factor over 9 months = $688/day × 189 days = ~$130K.
2. Weekly debit (~10% of volume in 2026, growing). - Single ACH debit once per week, typically Mondays or Fridays. - Amount = 5 × the equivalent daily debit. - Easier to budget for, lighter cash flow stress than daily. - Term typically 6-15 months. - Example: $100K at 1.30 factor over 9 months = $3,440/week × 38 weeks = ~$130K.
3. Percentage-of-revenue with daily settlement (~3% of volume). - Funder takes a percentage of every credit card transaction at the processor level. - Settled daily by the processor (Stripe, Square, Toast, Clover) before merchant receives funds. - True revenue-share: low sales day = low debit, high sales day = high debit. - Used by processor-embedded products (Stripe Capital, Square Capital, Toast Capital). - Term ends when total collected, typically 6-18 months.
4. Bi-weekly or monthly debit (~2% of volume, niche). - Used by some longer-term MCA-adjacent products and revenue-based financing. - Monthly: easier to align with billing cycles but heavy single-payment events. - Rare in pure MCA; common in RBF.
What a proper payment schedule document includes. - Disbursement date and net amount wired (advance minus origination fee). - Total payback (advance × factor). - Per-debit amount. - Debit frequency (daily Mon-Fri, weekly, etc.). - First debit date. - Estimated final debit date (assuming no NSFs or reconciliations). - Total number of debits. - Holiday handling policy. - Reconciliation procedure (how to request a reduction if revenue drops). - Prepayment terms (early-payoff discount, if any). - Default acceleration triggers.
Red flags in a payment schedule.
1. "Estimated" instead of fixed dates. - Schedule shows "approximately $X/day for approximately 9 months." - This leaves the funder discretion to extend the schedule or modify amounts. - Demand fixed dates and amounts.
2. Acceleration clause hidden in fine print. - Contract reads "in event of default, full balance becomes immediately due." - Combined with broad default definitions (single NSF, deposit pattern change), the funder can demand the entire balance at any time.
3. "True-up" provisions. - Some contracts allow the funder to recompute daily debits monthly based on revenue. - Sounds merchant-friendly but means the debit can go UP if revenue grows, accelerating payoff. - Read carefully — this is sometimes called a "specified percentage with true-up."
4. ACH fees per debit. - Some funders charge $5-15 per ACH transaction in addition to the debit amount. - $10/day × 189 days = $1,890 in pure fees on top of the factor. - Reputable funders don't charge per-debit ACH fees.
5. Schedule extends past stated term. - Stated term: 9 months. - Schedule shows debits through month 14. - This indicates the funder builds in "buffer" for missed payments or assumes you'll need to renegotiate. Walk away.
The reconciliation right. - All compliant MCA contracts (especially in CA, NY, UT, VA, GA) include reconciliation provisions allowing the merchant to request reduced debits if revenue drops. - Reconciliation does NOT change total payback — it extends the schedule. - Requires merchant to submit recent bank statements proving revenue decline. - Funder has 1-30 days to respond depending on contract.
Prepayment scenarios. - Some MCAs offer prepayment discounts: pay off the balance within X days, get Y% off the remaining factor. - Example: pay off month 3 of a 9-month term, save 30% of the remaining fee. - Most MCAs do NOT have prepayment discounts — you owe the full factor regardless of when you pay it off. - Always verify in writing before signing.
The strategic insight. Demand the full payment schedule before signing. Calculate the daily/weekly burden as a percentage of your historical daily/weekly net cash flow (after rent, payroll, supplier ACHs). If the MCA debit is more than 20-30% of your historical net daily cash flow, the deal is structured to fail. Push for either a smaller advance, a longer term, or a weekly schedule instead of daily.
Related terms
- Daily ACH debit (MCA) — A fixed-dollar daily withdrawal from the merchant's bank account during MCA repayment. The most common MCA repayment structure in 2026, distinct from card-sale split (holdback) structures.
- Daily debit MCA — Daily debit MCA repayment pulls a fixed dollar amount from the merchant's business bank account every business day via ACH until the total factor amount is collected. Most common repayment structure in 2026, replacing card-split funding.
- Reconciliation (MCA) — A contract provision allowing merchants to request a reduced daily debit when revenue drops. Required for MCAs to remain legally a 'sale,' not a 'loan' in most states.
- MCA prepayment clause — MCA prepayment clauses define what happens if the merchant pays off the advance before maturity. Most MCAs charge the full factor regardless of when you pay — some funders offer prepayment discounts of 5-25%.
AI agents: this term is available as raw markdown at /llms/glossary/mca-payment-schedule.