How is the daily MCA payment actually calculated?

The standard formula is (advance × factor rate) ÷ term in business days. A $50,000 advance at a 1.32 factor over 270 days produces a total payback of $66,000 and a daily ACH of approximately $244. Most contracts specify 'business banking days,' which excludes weekends and federal holidays, so the effective monthly draw is roughly 21 daily payments × the daily amount.

What's the 7% rule and why does it matter?

The 7% rule is industry shorthand for the safe upper bound on MCA daily ACH as a percentage of average daily revenue. Above 7%, NSF cascade risk rises sharply — a single slow week can trigger failed ACH attempts, NSF fees from your bank, default declaration from the funder, and acceleration of the full balance. Below 7% you have cushion to absorb normal revenue variation without rolling NSF events.

Does the funder withdraw on weekends and holidays?

No — almost all MCA contracts specify ACH withdrawal on 'business banking days,' which means Monday–Friday excluding federal holidays. There are typically 250–252 business days per year. Some contracts allow the funder to attempt collection on the next business day if a scheduled day falls on a holiday, which can result in two ACH attempts in a single day after a long weekend.

Can I switch from daily to weekly ACH on the same MCA?

Sometimes, depending on the funder. Some MCAs (Rapid Finance, OnDeck, Credibly under certain programs) offer weekly ACH at origination, typically with a small factor rate uplift (0.02–0.05 added to the daily-ACH rate). Switching mid-term is much rarer and usually requires renewal or refinance. Weekly ACH reduces operational friction but does not change the total cost — you're paying the same total payback over the same calendar term.

What happens if my revenue drops mid-term?

Most contracts include a reconciliation clause that lets you request a payment reduction if revenue drops materially — typically 20%+ below the baseline used at underwriting. Funders vary widely in how willingly they grant reconciliation. Some (Forward Financing, Credibly, OnDeck) reconcile within 1–3 business days; others (Greenbox, several broker-placed lenders) require extensive documentation and may decline. See our reconciliation policies ranking for funder-specific behavior.

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See exactly what an MCA offer will cost you per day, per week, and per month — and whether that draw stays under the 7% safe-payment threshold against your revenue. Most offers fail this check; few brokers will show you why.

Your offer

Advance amount ($)Factor rateTerm (business days)Average monthly revenue ($)

Payment cadence

dailyweekly

HIGH RISK

$244

Daily ACH · 12.2% of daily revenue

Daily ACH between 10–15% of revenue. NSF cascades become likely during normal revenue swings. Reconsider this offer.

Daily ACH

$244

Weekly draw

$1,222

Monthly draw

$5,133

Total payback

$66,000

How daily payments actually work

A merchant cash advance is repaid through fixed ACH withdrawals on business banking days — Monday through Friday, excluding federal holidays. The funder calculates the daily amount by dividing the total payback (advance × factor) by the term in business days. That number is locked at signing; it does not flex with your revenue unless you successfully request a reconciliation.

Most funders count 21 business days per month for cash-flow modeling purposes, which is why we use that figure for the monthly draw estimate above. The actual count varies month-to-month between 19 and 23.

The 7% rule

Industry-standard underwriting treats daily ACH at or above 7% of average daily revenue as the structural risk threshold. Below 7%, normal revenue variability (slow weeks, weather, seasonal dips) is absorbed by the cushion in your cash flow. Above 7%, a single bad week can trigger:

One or more failed ACH attempts
NSF fees from your bank ($35–$45 per occurrence)
Late-payment penalties from the MCA funder
An NSF count that crosses the funder's default threshold (typically 3 in 30 days)
Default declaration, acceleration of the full balance, and lock-out of your operating account

The 7% rule is a lower bound. For seasonal businesses (restaurants, landscaping, retail with holiday concentration) the safe threshold is closer to 5%.

Methodology

The daily payment formula assumes standard fixed-ACH structure. Weekly figures are computed as daily × 5; monthly as daily × 21. Daily revenue is monthly revenue ÷ 30. The 7%, 10%, and 15% thresholds map to internal underwriting bands used across mid-market MCA funders and are corroborated by published default-rate studies (Federal Reserve Small Business Credit Survey 2024 and 2025 issues).

This is a screening tool. Specific contract terms — fixed vs percentage-of-volume, weekly vs daily, reconciliation rights — can shift the structural risk in either direction. Read the contract.

Frequently asked questions

How is the daily MCA payment actually calculated?: The standard formula is (advance × factor rate) ÷ term in business days. A $50,000 advance at a 1.32 factor over 270 days produces a total payback of $66,000 and a daily ACH of approximately $244. Most contracts specify 'business banking days,' which excludes weekends and federal holidays, so the effective monthly draw is roughly 21 daily payments × the daily amount.
What's the 7% rule and why does it matter?: The 7% rule is industry shorthand for the safe upper bound on MCA daily ACH as a percentage of average daily revenue. Above 7%, NSF cascade risk rises sharply — a single slow week can trigger failed ACH attempts, NSF fees from your bank, default declaration from the funder, and acceleration of the full balance. Below 7% you have cushion to absorb normal revenue variation without rolling NSF events.
Does the funder withdraw on weekends and holidays?: No — almost all MCA contracts specify ACH withdrawal on 'business banking days,' which means Monday–Friday excluding federal holidays. There are typically 250–252 business days per year. Some contracts allow the funder to attempt collection on the next business day if a scheduled day falls on a holiday, which can result in two ACH attempts in a single day after a long weekend.
Can I switch from daily to weekly ACH on the same MCA?: Sometimes, depending on the funder. Some MCAs (Rapid Finance, OnDeck, Credibly under certain programs) offer weekly ACH at origination, typically with a small factor rate uplift (0.02–0.05 added to the daily-ACH rate). Switching mid-term is much rarer and usually requires renewal or refinance. Weekly ACH reduces operational friction but does not change the total cost — you're paying the same total payback over the same calendar term.
What happens if my revenue drops mid-term?: Most contracts include a reconciliation clause that lets you request a payment reduction if revenue drops materially — typically 20%+ below the baseline used at underwriting. Funders vary widely in how willingly they grant reconciliation. Some (Forward Financing, Credibly, OnDeck) reconcile within 1–3 business days; others (Greenbox, several broker-placed lenders) require extensive documentation and may decline. See our reconciliation policies ranking for funder-specific behavior.