Typically, yes, you should talk to them first, but preferably in writing and utilizing your MCA contract's reconciliation clause if it has one, and not by saying "I can't pay you anymore" over the phone.
This may seem counterintuitive, since one law firm's guide says to call them first and MCA settlement companies often say not to talk to them anymore.
Should You Talk To Your MCA Funder First?
It's generally safe to talk to your funder first if you're taking advantage of your contract's reconciliation clause. For example, your contract with Cedar Advance lets you request a reconciliation by written notice or email and has Cedar complete it within two business days, and your contract with Arin Funding uses the same two days. Your contract with Parkview Advance wants an email with "REQUEST FOR RECONCILIATION" in the subject line and your most recent bank and processing statements attached, and gives them 5 business days to review.
This step matters because, as a New York appellate court held in September of 2025 in Apollo Funding Co. v Dave Reilly Construction, since the merchant "did not engage in the agreement's reconciliation procedure," the court's review of its argument that the reconciliation process was illusory was "precluded." The court held the same way in Diesel Funding v Build Retail in April of 2026. Also, Cedar's contract says you're in default if an ACH debit is blocked or stopped "without providing any advance written notice to CEDAR with an alternative method," and Arin's has similar language.
What Could Go Wrong If You Talk To Your MCA Funder First?
They may move fast. In Oakshire Properties v Argus Capital Funding, the merchant told the funder on December 18, 2018 that sales had dropped and asked for a lower daily payment. Two days later, the funder filed a Confession of Judgment for $319,993.20 plus $105,822.75 in fees and costs. So, you should find out first if you signed a Confession of Judgment, and if you did, where it can be filed. Note that it cannot be filed in New York against an out-of-state business under CPLR 3218, and that you have 30 days to file a petition to strike or open it in Pennsylvania under Rule 2959 of the Pennsylvania Rules of Civil Procedure.
You may say something that's an Event of Default under your contract. Parkview's contract lists 11 and Cedar's lists four. If you say something like, "We're depositing into a different bank now," or, "We took out another Advance somewhere else," or, "We're going to stop the ACH," or, "We're closing up," those could line up with Events of Default under your contract, and if you say them to the person collecting, that's all they need to know.
You may think the conversation is "off the record." In New York, statements made in compromise negotiations are not admissible if the claim is "disputed as to either validity or amount" under CPLR 4547, and the same is generally true under Federal Rule of Evidence 408. However, the rules don't exclude evidence that's otherwise discoverable or evidence used for another purpose. Also, New York is a one-party consent state for recording calls under Section 250.00 of the New York Penal Law. And a signed written acknowledgment of the balance can restart the statute of limitations under Section 17-101 of the New York General Obligations Law. So, don't sign anything they send you to "acknowledge the balance."
What if a settlement company contacts the funder first instead?
There are a few issues. First, forms like Parkview's add an extra $10,000 or 25% of the outstanding balance if you retain a debt relief firm who contacts the funder to redirect communication to them. Look for this in the fee schedule. Second, some debt relief firms will tell you to stop talking to the funder, which can collide with the advance-notice defaults in Cedar's and Arin's forms. Third, what you say to anyone who is not a lawyer is not privileged on the face of New York's privilege statute, CPLR 4503, which runs to "an attorney or his or her employee."
Finally, if you are already being sued, a confession of judgment has already been signed, or an account has already been frozen, you need to talk to a lawyer, not a debt settlement company. See Do I need a lawyer for MCA debt, or can a settlement company handle it? You may also be interested in Should I hire a debt settlement company or a law firm for MCA debt?.
I already called my funder. What should I do now?
You should do the following things, in order:
- Write down exactly what was said, when, and who you spoke to;
- Follow up with them in writing, preferably citing the section number of the reconciliation section of the agreement, with attached statements;
- Correct or narrow anything you said on the call, such as stating that you have not changed accounts or that you are requesting an adjustment under the contract; and
- Hold off on signing any documents they provide until you have had a chance to review them.
Lastly, watch the time limits. The reconciliation clauses give the funder 2 or 5 business days to respond to your request. If you received notice of a confession of judgment in Pennsylvania, you only have 30 days. If you have been sued in New York, you only have 20 or 30 days to respond to the summons. If you told the funder you were stopping payment and your form requires advance written notice with another payment method, ask counsel whether a written follow-up repairs that.
Frequently Asked Questions
Can the funder charge me for hiring a debt settlement company?
Some can. The Parkview Advance agreement adds $10,000 or 25% of the outstanding balance if you retain a debt relief firm who contacts the funder to redirect communication. Check your fee schedule.
Is the call with the funder recorded?
Assume it is. New York is a one party consent state, so they don't need your permission to record the call.
Does signing something on the first call with the funder renew the statute of limitations?
In New York, yes. Under New York General Obligations Law 17-101, a signed written acknowledgment or promise can establish a new or continuing contract, but an oral one can't. So, don't sign anything acknowledging the balance until counsel has reviewed it.
Is it safe to not talk to the funder anymore since the debt settlement firm told me not to?
Be careful. Certain funding agreements, such as those used by Cedar and Arin, contain a default provision for not providing advance written notice before blocking a debit. So going silent may itself be a default.