To legally stop ACH withdrawals from an MCA on your business account, you can:
- send a written revocation to the funder per the contract requirements (ideally with an alternative payment method), and
- file a stop payment order with your bank for the specific company ID and range of amounts.
Then log every debit and return.
See whether to stop paying your MCA and what happens if you stop paying.
Which rules govern an ACH debit from a business account?
ACH debits to your business account are governed by your bank's deposit agreement and the Nacha Operating Rules. Regulation E only applies to "an account established primarily for personal, family, or household purposes" (12 CFR 1005.2(b)(1)). Its 3-business-day stop right and 60-day dispute window don't cover a business operating account.
The Nacha Operating Rules are not a federal regulation; banks agree to follow them to participate in the private ACH network. Each bank's deposit agreement sets its stop payment charge, form and filing deadline. The UCC similarly requires that you file in time for the bank to act and describe the item to be stopped "with reasonable certainty" (UCC 4-403).
What are the ways to stop an MCA debit, and what code does each produce?
| Tool | What it does | Return code | Timing |
|---|
| Send Written Revocation to Funder | Notice and recordkeeping, doesn't actually stop ACH debit | N/A (R07 is consumer only) | Follow notice requirements in contract |
| File Stop Payment Order with Bank | Stops ACH debit at bank | R08 Payment Stopped | Before the debit or within 2 banking days after it posts |
| Open Debit Block or Filter with Bank | Bank treasury product that allows only listed company IDs | Depends on bank | Contact bank |
| Return ACH Debit as Not Authorized | Return ACH debit as not authorized | R29 | Within 2 banking days after it posts |
If the funder sends the debit with a consumer standard entry class code ("SEC code"), different Nacha rules apply (Nacha's R10 and R11 guidance). You may have 60 days to dispute instead of 2 banking days, so ask your bank which SEC code and company ID the funder uses.
How do you write an ACH revocation letter for an MCA?
Send the revocation to the funder as the funding agreement requires. This puts the funder on notice and creates a record. For example, Cedar Advance's Funding Agreement, filed with the SEC, calls your ACH authorization "irrevocable" absent Cedar's written consent until the purchased amount is paid. But it also makes a stopped debit a "default" only if done "without providing any advance written notice to CEDAR with an alternative method for CEDAR to collect." Other agreements are broader, making any two rejected debits in a calendar month a default (Oakshire Props. v Argus Capital Funding).
Your revocation should include:
- your business name and DBA;
- the date and number of the funding agreement;
- the name of the funder (as it appears on your bank statement);
- the debited account's last four digits; and
- the future date when the revocation should take effect.
State that it covers all future ACH debits under the agreement. If you will pay another way, say how and when you will start. Ask for written confirmation and a current ledger, and keep the mailing receipt or email header.
How do you file a stop-payment order that actually catches the debit?
Give your bank the funder's name as it appears on your statement, the company ID, the amount or range of amounts, and the dates. If you stacked funding, file a separate order for each funder.
Under the UCC, a stop-payment order must be in writing to be valid for six months; an oral order lapses after 14 calendar days unless confirmed by a record (UCC § 4-403). For non-consumer accounts, under the new ACH rules for 2021, that time is a minimum and need not be renewed in writing. Calendar the expiry date.
What if the MCA debit has already posted?
You have two banking days after the debit posted to have your bank return it under R08 or R29. Keep records of any debits that continue after payoff, which are the funder's problem under the FTC's allegations against Yellowstone Capital.
What records should you keep after stopping ACH withdrawals?
Keep records proving each debit, in case you must prove your fact and amount of loss under UCC § 4-403(c). Log the date, amount, description, company ID, any return code, and the stop order's date, expiry and confirmation number, and keep unaltered bank PDFs. Use your contract's reconciliation process; the Second Department refused to review an argument by a merchant who skipped it in Apollo Funding v Dave Reilly Construction.
Do Texas or Vermont limit automatic MCA debits?
Texas does, and Vermont will in 2027. Starting September 1, 2025, Texas Finance Code § 398.056 prohibits a provider from setting up automatic debits unless it has a valid, perfected, first-priority security interest in the account. Starting July 9, 2026, the Office of Consumer Credit Commissioner's rules (7 TAC 86.313) define debits as automatic if they are "authorized in advance to occur more than one time or on a recurring basis." One-time debits approved for each request fall outside it, so declining the request stops them. Only the state can enforce the law, for $10,000 per violation, but the OCCC can accept complaints under § 86.320. Vermont has similar provisions for contracts under $1M made or modified on or after July 1, 2027 (8 V.S.A. § 2247(d)).
For other costs, see our overview of stopping daily ACH withdrawals.
Frequently Asked Questions
Should I tell my bank the MCA debit is unauthorized?
If you signed an authorization, no. The R29 code means you never authorized the debit. If you later revoked it, call it a stopped or revoked payment. If you lie, the funder may have a claim for misrepresentation.
How long does a stop-payment order on a business account last?
Under the UCC, six months if written or 14 calendar days if oral unless confirmed by a record. For non-consumer accounts, the ACH rules make that a minimum that need not be renewed in writing.
What if the funder changes the debit amount or company name?
A stop order for a particular amount or description may miss a debit with a different one. See if your bank can stop all debits from that company ID, and file a new stop order if the funder uses a new name.
Can I stop another lender's debit without defaulting on my MCA?
Not necessarily. In the Cedar Advance agreement filed with the SEC, returning another creditor's debit is a default unless you explain the reason in writing within two business days, so read your contract first.