Key points
- Every MCA rests on a specified percentage of sales; the payment method is just how that percentage is collected.
- Split funding takes the holdback from each card batch, so payments rise and fall with card sales automatically.
- Fixed daily or weekly ACH debits stay the same in a slow week until you request a reconciliation.
- In the worked example, a slow week turns a 12% holdback into a debit equal to 20% of sales, a $960 gap reconciliation should return.
- ACH debits run only on banking days; check how your contract handles holidays and returned payments.
The specified percentage comes first
When you sign, you sell the funder a fixed dollar amount of future receipts, the purchased amount, and agree that it will collect a set share of your sales until it has that amount. The share is called the specified percentage or holdback. Big Think Capital describes holdbacks as commonly 5% to 15% of daily card or platform sales.
Fora Financial explains its revenue advance the same way: you repay through a set percentage of your daily or weekly revenue, so busy periods pay the advance down faster and slow periods take less. Everything else in this guide is a way of turning that percentage into money leaving your account.
Split funding through your card processor
Say your holdback is 10% and Tuesday's card batch settles at $3,000. The processor routes $300 to the funder and deposits $2,700 with you. On a $1,000 day the funder gets $100. Nobody has to adjust anything, because the payment is the percentage.
Split funding tracks card sales exactly, but it only sees card sales. Cash, checks and ACH receipts pass it by, so a card-split deal is sized on card volume. It also ties you to your processor. Read whether the contract treats switching processors or routing card sales elsewhere without the funder's consent as a default, and get consent in writing before you change anything.
Fixed daily or weekly ACH debits
The funder estimates your sales from your bank statements, applies the specified percentage and fixes a debit. Credibly, for example, describes a fixed daily or weekly ACH transfer sized to your revenue at approval, with monthly reconciliation available if actual sales fall below projections. Cashable debits daily payments Monday to Friday, except on bank holidays, and also offers weekly and hybrid schedules.
New York's disclosure rules describe this setup as a true-up mechanism: periodic payments based on a pre-set amount, with adjustments so that total payments reflect the agreed split of sales. The fixed debit is a convenience. The percentage is the deal.
A normal week and a slow week
Worked example. $40,000 advance at a factor rate of 1.30, so the purchased amount is $52,000 and the cost is $12,000. Specified percentage: 12%. Typical week: $20,000 in sales. The fixed ACH version debits $480 per business day, which is 12% of an average $4,000 day.
| Week | Sales | Holdback at 12% | Fixed ACH (5 × $480) | ACH as share of sales |
|---|---|---|---|---|
| Normal week | $20,000 | $2,400 | $2,400 | 12% |
| Slow week | $12,000 | $1,440 | $2,400 | 20% |
In the slow week, the fixed debit takes $960 more than the specified percentage. A working reconciliation should credit that $960 back or lower future debits. At the normal pace, $52,000 takes about 108 business days, roughly 22 weeks, to collect.
One slow week is a nuisance. A slow month on fixed debits, with no reconciliation, can take 20% of sales from a business whose margin is thinner than that. That is when the difference between a true MCA and a fixed loan payment becomes real money.
Estimate the payment before you sign
- Estimated term. Purchased amount ÷ (specified percentage × average daily sales). In the example: $52,000 ÷ (12% × $4,000) = about 108 business days.
- Debit as a share of deposits. Fixed debit ÷ average daily deposits: $480 ÷ $4,000 = 12%. If a proposed debit works out to a larger share than the specified percentage in the contract, ask why before you sign.
- Debit against margin. If the business keeps 10 cents of each sales dollar and the debit takes 12 cents, the advance has to pay for itself through whatever the cash makes possible, such as a bulk discount on inventory.
Run these numbers on your own last 4 months of deposits, not your best month. A debit sized to a strong season will pinch in a slow one, and the funder sized it from the same statements you are looking at.
How reconciliation works in practice
- You ask in writing, usually for a set period such as the last month.
- You send proof of actual sales: bank statements, and card processing statements if the deal is based on card volume.
- The funder applies the specified percentage to those sales and compares the result with what it debited.
- It credits the excess back to you or lowers your debit going forward.
Before you sign, find the reconciliation clause and check 4 things: how often you can ask, which documents it requires, how many business days the funder has to respond, and whether you must be current on payments to qualify. A right you cannot practically use is not much of a right. When the New York Attorney General settled with Yellowstone Capital in January 2025, the office alleged the company used measures that ensured merchants almost never qualified for the reconciliations it promised. Our guide to MCA reconciliation rights covers what to look for clause by clause.
Stacked advances hit the same deposits
If you already remit 12% of sales to one funder and take a second advance at 10%, 22% of every sales dollar now goes out before payroll, rent or suppliers. With fixed debits, the combined daily amount stays the same in a slow week. Your first contract may also bar additional advances without the funder's consent, and breaking that clause can be a default on its own.
Weekends and bank holidays
The ACH network runs on the Federal Reserve's calendar. Remaining Federal Reserve holidays in 2026 are Columbus Day on October 12, Veterans Day on November 11, Thanksgiving on November 26 and Christmas on December 25, followed by New Year's Day on January 1, 2027. When a holiday falls on a Sunday, the Reserve Banks close the following Monday; when it falls on a Saturday, they stay open the Friday before.
Read how your contract handles a missed banking day. If the debit is simply skipped, the term stretches by 1 business day. If it is collected on the next business day, that day's debit doubles, which matters in a holiday week when your own deposits also land a day later. Plan the cash for it either way.
When a debit bounces
Contracts can charge a returned-payment, or NSF, fee. Smart Step Funding, for example, says an NSF fee may be charged to cover any NSF fee its bank charges it. Repeated returns can also be listed as an event of default, which may make the full balance due at once.
If you see a shortfall coming, request a reconciliation or a temporary adjustment in writing with your latest statements. Do not revoke the ACH authorization or move deposits to a new account without the funder's written agreement, because the contract can treat either step as a breach. To test how a given holdback or daily debit fits your cash flow, try the holdback calculator and the daily payment calculator.
Questions
Can a funder take more than the specified percentage?
With split funding, the processor takes exactly the percentage. With fixed debits, a slow period can push the debit above that share until a reconciliation adjusts it, so request one promptly and include your statements.
Do MCA debits come out on weekends?
No. ACH debits settle on banking days, Monday to Friday, excluding Federal Reserve holidays. Your contract decides whether a holiday debit is skipped or collected on the next business day.
What happens if I switch card processors during a split-funded MCA?
The funder's share is taken by your processor, so switching can break the arrangement. The contract may treat an unapproved switch as a default, so get the funder's written consent first.
Can I move from daily to weekly payments?
Some funders, including Credibly and Cashable, offer daily or weekly schedules at signing. Changing the schedule mid-deal needs the funder's written agreement, so ask before you sign if weekly suits your cash flow better.
Have an offer on the table?
Decode it before you sign, or let us bring back offers from funders that fit, each with its full cost.
Sources
- Ecommerce funding — Big Think Capital (checked 2026-09-30)
- Revenue advance — Fora Financial (checked 2026-09-30)
- Merchant cash advance — Credibly (checked 2026-09-30)
- Cashable business funding — Cashable (checked 2026-09-30)
- 23 NYCRR § 600.1, definitions including true-up mechanism — Legal Information Institute, Cornell Law School (checked 2026-09-30)
- Holiday schedules — Federal Reserve Financial Services (checked 2026-09-30)
- Attorney General James announces $1 billion settlement with predatory lender Yellowstone Capital — New York State Attorney General (checked 2026-09-30)
- FAQs for customers — Smart Step Funding (checked 2026-09-30)
This guide is general information, not legal, tax or financial advice. Figures are examples worked with the method in our disclosures.