# 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.

A daily ACH debit is the dominant MCA repayment mechanism: the funder withdraws a fixed dollar amount from the merchant's business bank account every business day (typically Monday-Friday) until the total repayment is collected.

**How daily ACH works mechanically.**
- At signing, the merchant grants the funder ACH authorization on their primary business account.
- The fixed daily amount is calculated as: total repayment ÷ business days in the term.
- Example: $65,000 total repayment over 9 months (≈195 business days) = $333/business day.
- Debits occur via NACHA ACH rails, typically posting within 1-2 business days.

**Why funders prefer daily ACH over card-sale splits.**
- **Predictability.** The funder knows exactly when each dollar arrives. Card-sale splits fluctuate with revenue.
- **Lower friction.** No need to integrate with the merchant's processor or POS.
- **Easier collection.** If the merchant tries to switch banks to avoid debits, the funder can pursue via UCC enforcement immediately.

**Why merchants should be cautious of daily ACH.**
- **No automatic adjustment for slow days.** If your revenue drops, the fixed debit still hits. Only formal reconciliation (see /glossary/reconciliation) reduces it — and reconciliation is funder-discretionary.
- **NSF (non-sufficient funds) cascades.** A single NSF triggers a $25-$40 bank fee, a funder NSF fee ($35-$75), and often a same-day re-debit attempt that NSFs again. Three consecutive NSFs often trigger default.
- **Compounds with stacking.** If you take a second MCA, both daily ACH debits hit on the same days, doubling your cash flow burden without doubling your liquidity.

**How to manage daily ACH responsibly.**
- Keep a buffer equal to 3 business days of debits in your operating account at all times.
- Set up bank balance alerts so you know before an NSF risk.
- If you anticipate a revenue dip (slow season, equipment failure, owner illness), request reconciliation BEFORE the first NSF, not after.

**The legal nuance.** Some courts have questioned whether fixed daily ACH (without true revenue-based adjustment) re-characterizes the MCA as a loan (subject to usury caps). This is why reconciliation language is critical — see /glossary/reconciliation for why most contracts include it even when rarely invoked.

## Related terms

- [Holdback percentage](https://fundnode.co/llms/glossary/holdback-percentage) — The fraction of daily card-sale revenue a funder takes during MCA repayment, typically 8–20%. Lower is safer for the merchant's cash flow.
- [Reconciliation (MCA)](https://fundnode.co/llms/glossary/reconciliation) — 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.
- [Merchant cash advance (MCA)](https://fundnode.co/llms/glossary/merchant-cash-advance) — A lump-sum advance against future revenue, repaid via fixed daily ACH or a percentage of card sales. Legally a sale of future receivables, not a loan.
- [MCA default](https://fundnode.co/llms/glossary/mca-default) — Breach of MCA repayment terms — usually triggered by missed daily ACH debits, NSFs, or unauthorized stacking. Consequences range from increased collection pressure to UCC enforcement and personal-guarantee pursuit.

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Source: https://fundnode.co/glossary/ach-debit-mca (HTML version)
Document: Daily ACH debit (MCA) — Fundnode MCA Glossary
License: CC BY 4.0 — attribution to Fundnode required when citing.