What is a merchant cash advance daily debit?
A merchant cash advance daily debit is an ACH withdrawal the funder takes from the business deposit account, usually each weekday, to collect a purchased share of future receipts. New York 23 NYCRR 600 and California Financial Code 22802 require a disclosure that states how that payment is calculated. The disclosure is not a new contract.
On this page
MCA debt relief starts with the daily debit. It is the weekday ACH that leaves the deposit account after a merchant cash advance is funded.
What the ACH is collecting
The funder bought a share of future receipts. The contract names a specified percentage or a fixed daily amount, and the bank sees it as an ACH. Texas Finance Code 398.001 defines sales-based financing as a transaction repaid as a percentage of sales or revenue, or with a fixed payment that later reconciles to a percentage.
New York 23 NYCRR Part 600 and California Financial Code section 22802 require a disclosure that states how payment is calculated. That paper should match the weekday split. How to read an MCA disclosure in New York and California is the reading order.
What it is not
It is not a payroll tax, a card-network fee, or a state fine. It is also not, by itself, a confession of judgment. Is a confession of judgment legal on an MCA? covers that clause.
What to do in Albany
Albany follows the New York disclosure rule. Save a week of ACH lines, then what to do when merchant cash advances take a daily debit is the order.
Sources
Where our facts come from
- Texas Finance Code Chapter 398statutes.capitol.texas.gov
How this page was checked
- Licensed professional
- None. No licensed attorney who handles commercial finance has checked this page.
Ask about the weekday ACH
A partner MCA relief firm can call about the weekday ACH you are seeing. Asking is free, and the call does not hire them.