Holdback and remittance: how MCA payments work

Once an advance funds, the merchant delivers the payback through remittances. There are two common structures.

Percentage of receipts

A set share of the business's daily card or bank receipts goes to the funder. When sales are higher, more goes back; when they are lower, less does.

Fixed daily or weekly ACH

A fixed amount debited from the business account on a schedule. Easier to plan around, but the merchant must keep enough in the account.

Reconciliation

Many contracts let the merchant ask to adjust remittances if receipts drop, so payments track actual sales. Merchants should read their contract and ask the funder how it works.

Why brokers should care

Merchants who understand their remittance are calmer clients and better renewal candidates. Explain it plainly on the offer call. Related: factor rates explained and renewals.