In most cases, you can reduce your daily or weekly MCA payment without defaulting. These fall into two buckets: provisions of the contract that allow you to reduce your payment (most often reconciliation) or those that require you to obtain a contract amendment in writing.
Does asking for a lower MCA daily payment put me in default?
Asking for a reduction will not constitute a default under the standard form contracts we have reviewed, although none says so outright. Under the SEC filed Cedar Advance agreement, the events of default include intentionally preventing collection of Funds Owed and, without prior written notice, stopping or blocking any ACH debit (this last one incurs a $2,500 fee). Under one agreement we reviewed, once you default your Specified Percentage becomes 100%. So ask but continue to make your current payments until you receive the new numbers in writing.
Federal Regulation E does give a right to stop ACH pulls with three days’ notice, but it applies only to consumer accounts (see 12 CFR 1005.2(b)(1)), not your business operating account. And under Section 23 of the Cedar contract, you cannot change the Bank Account or Processor without Cedar’s prior written consent; doing so would be intentionally preventing collection, which is a default.
Are there contract provisions that will allow me to reduce my payment?
Most definitely: reconciliation, and you do not need the funder’s permission to exercise this right. Under common New York forms, you send a written request with your bank statements, and the funder has two business days after receipt of a complete request to true up your payment amount to the specified percentage of your receipts. Some contracts provide that the debits will be halted during the reconciliation, others (like the 2026 Pristine Capital form) do not.
In the Pristine example, if your payment is $1,075 and your specified percentage is 5.06%, you are deemed to have daily receipts of about $21,245. If actuals drop to $12,000, the new daily payment should be about $607 (5.06%). But Pristine and some others look to your receipts from the date of the agreement, so great early months make the reconciliation less beneficial, and if they undercollected, they can debit you for the undercollection and increase your payment. Forms with a monthly reconciliation help more when receipts just dropped.
Courts have weighed this, as in Apollo Funding, 2d Dept, 2025, where the merchant never asked for reconciliation and the funder won, and People v Richmond Capital, 1st Dept, 2026, in which a reconciliation clause that wasn’t being followed was one factor the court relied on in finding these to be loans.
Some contracts also let the funder, upon your request, adjust your payment “at Purchaser’s sole discretion.”
Will my payments be lower if I switch from daily to weekly?
No. The form clause in at least five funders’ agreements filed with the SEC between 2023 and 2026 makes the weekly payment 5 times the daily payment. The Pawn Funding disclosure filed with the SEC provides that the payment amount changes “proportionately,” so $4,996.67 per business day becomes $24,983.35 per week. And in every agreement we’ve seen, the funder, not the merchant, elects the switch, on one day’s written notice. You can only ask.
Why would you want to go weekly? The money stays in your account longer and there are fewer days the debit can bounce. However, the NSF fees can be greater for a weekly debit. In the sample Aurai agreement, the fee is $100 per missed daily debit and $500 per missed weekly one. Aurai allows two NSF fees before an event of default, and the total due is the same either way.
What’s the difference between a reconciliation, modification and forbearance agreement?
They differ in who controls the outcome and the paperwork:
| Means of Changing Payment | Who has control | What changes | Risks |
|---|
| Reconciliation | Based on formula in contract | Payment is reset to specified % of revenue | Cumulative lookback period may mean little or no cut, or payment may increase |
| Ask to change from daily to weekly | Up to funder to decide | Only timing of payments, weekly payment = 5x daily payment | Larger individual NSF fees if weekly payment bounces |
| Modification Agreement | Up to both parties, needs to be signed by both | Lower remittance % for longer period of time | May include triggers for new judgments against you, guaranty usually still in place |
| Forbearance Agreement | Up to both parties, needs to be signed by both | Temporary relief from making payments or lower payments | May have to disclose to new funder |
Do I need a writing to modify my MCA payments?
Yes, modifications need to be in writing and signed. Section 47 of Cedar’s contract provides that no modification, amendment, waiver or consent is effective unless it is “in writing and signed by all parties.” Even with a modification, you may still be on the hook personally, as many personal guaranties cover the agreement if “renewed, amended, extended, or otherwise modified.” (E.g., see Pristine’s form.) For more on negotiating one, see Can I renegotiate my MCA terms directly with the funder? and Can I negotiate with a merchant cash advance company myself?
Some state laws also reach modifications. Vermont’s new law, 8 V.S.A. § 2247, applies to contracts that are “entered, modified, amended or restructured” on or after July 1, 2027 for less than $1 million. Texas’s new law, HB 700, provides that confessions of judgment in commercial sales-based financing agreements will be void.
Frequently Asked Questions
Can the funder verbally agree to let me pay less?
Probably not. Most contracts require any modification to be in writing and signed by all parties. See, e.g., Cedar Advance’s contract, Section 47.
What if I can’t make one daily payment?
Let the funder know in writing. Under Pristine Capital’s contract, for example, if you’re not otherwise in default and you give notice no more than one business day in advance that funds will be short, the $50 NSF fee is waived. See the 2026 version of Pristine’s form.
What shouldn’t I sign if I want to reduce my payments?
You shouldn’t sign anything that includes a new confession of judgment, broadens your personal guaranty, admits to how much you owe, waives any defenses you may have to the advance or includes any new fees. A workout stipulation can carry one: in one 2026 New York case, a stipulation allowed the funder to enter a judgment against the merchant for $1,476,330.68 without giving the merchant any notice.
Does my state offer any additional protections?
Pennsylvania is not on the list of states with commercial financing disclosure laws in a March 2026 survey. Pennsylvania allows confessions of judgment for commercial transactions.