Merchant cash advance payments are fixed ACH debits from your business bank account, collected each business day or once a week, until the purchased amount has been delivered. The payment is estimated from your average revenue and the agreed percentage of sales you've sold. Because it's tied to your sales, you can ask for a reconciliation if revenue drops. InstaFunders collects daily, with weekly payments available in many cases.
What is the agreed percentage of sales?
When you take a merchant cash advance, you sell a portion of your future receivables. The agreement states what share of your sales that portion represents. You'll see it called the specified percentage, the holdback or the split; they all mean the same thing.
The percentage doesn't change what you deliver in total. That's the purchased amount, fixed by the factor rate when you sign. The percentage shapes the pace: it's the basis for setting how much each payment should be, so that delivery tracks what your business actually brings in.
Daily vs. weekly MCA payments
Most advances today are collected by a fixed ACH debit rather than by taking a cut of each card swipe. There are two common schedules:
| Daily payments | Weekly payments | |
|---|---|---|
| When the debit runs | Each business day, typically Monday through Friday | Once a week, on a set day |
| Size of each debit | Smaller | Larger, roughly five daily payments combined |
| Weekends and bank holidays | No debit on days banks don't process ACH | Usually unaffected unless the set day is a holiday |
| Best for | Businesses with deposits most days | Businesses that are paid in batches, or prefer one debit to plan around |
InstaFunders collects daily payments as standard, and weekly payments are available in many cases. Details are on our weekly payments page.
How is an MCA payment estimated from your revenue?
The underwriter looks at your recent bank statements to estimate your typical monthly revenue, applies the agreed percentage, and converts the result into a daily or weekly amount. Dividing the purchased amount by that payment gives an estimated term.
Hypothetical example. A business averages $150,000 a month in true revenue and agrees to a 10% specified percentage. That's about $15,000 a month. With roughly 21 business days in a month, the daily payment comes to about $714; a weekly payment would be about $3,460. If the purchased amount were $70,000, it would be delivered in about 98 business days, or a little under five months. Round numbers for illustration only.
Two details are worth knowing. First, "revenue" here means real sales deposits, not transfers between your own accounts or money from other financing. Our guide to what underwriters look for in bank statements explains the difference. Second, the term is an estimate, not a deadline. An MCA has no fixed due date; the advance is complete when the purchased amount has been delivered.
What happens to MCA payments on a slow week?
The debit is a fixed amount, so on a slow week it stays the same even though your sales don't. A single soft week is usually something a healthy account absorbs. The question is what happens when slower sales last.
That's what reconciliation is for. Because you sold a percentage of your sales, not a fixed monthly bill, most agreements give you a way to ask the funder to compare what was collected against what the agreed percentage of your actual receivables would have been, and adjust. You'll typically send recent bank statements to show what came in. The full process is in our MCA reconciliation guide.
Reconciliation doesn't reduce the purchased amount. Smaller payments mean the advance takes longer to deliver, but the cost stays the same.
What if an MCA payment is returned for insufficient funds?
If there isn't enough in your account when the debit runs, your bank returns it, usually coded as NSF (non-sufficient funds). A few things generally follow:
- Your own bank may charge you a returned-item or overdraft fee.
- Your agreement may set a fee for returned payments. Read that section before you sign.
- The funder will usually try to collect the missed amount, sometimes by re-presenting the debit.
- Repeated returns, or blocking or revoking the debit without talking to the funder, are commonly treated as a breach of the agreement.
The best move is simple: call your funder first, before the debit hits, if you can see a shortfall coming. A funder that hears from you early has options, such as a reconciliation; a funder that only sees returned debits has fewer. At InstaFunders, call us at 844-828-7986.
How many payments will you make?
The number of payments is the purchased amount divided by the payment. On a hypothetical $70,000 purchased amount at $714 a day, that's about 98 payments. InstaFunders' maximum term is 10 months, so an offer is sized so that its payments complete within that window on your expected sales.
If payments are reduced after a reconciliation, the count goes up. If you pay the balance off early, it goes down. See paying off an MCA early.
How to keep MCA payments manageable
- Run the payment against your slowest month in the last year, not your best.
- Keep a cash cushion in the account the debits come from.
- Count every existing advance's payment, not just the new one. See positions and stacking.
- Ask whether weekly payments would suit how you're paid.
- Talk to your funder at the first sign of a sustained slowdown, not after the third returned debit.
You can model different payment sizes in the calculator, and check whether your business fits on the requirements page.
Frequently asked questions
Are merchant cash advance payments taken on weekends?
Daily payments are typically debited on business days only, Monday through Friday, because ACH debits are processed on banking days. Weekends and bank holidays usually have no debit. Weekly payments run once a week on a set day.
Can I choose weekly instead of daily payments?
Often, yes. InstaFunders collects daily as standard, and weekly payments are available in many cases. Ask when you apply. A weekly payment is larger than a daily one, so make sure your account can carry it on the day it runs.
Does my MCA payment change when my sales change?
The debit is a fixed amount, so it doesn't adjust by itself. Because the advance is based on an agreed percentage of your sales, you can request a reconciliation if revenue falls, which can bring payments in line with what you're actually bringing in.
What happens if I miss a merchant cash advance payment?
A debit returned for insufficient funds can bring bank fees and any returned-payment fee in your agreement, and repeated returns are commonly treated as a breach. Call your funder before a debit is due if you see a shortfall coming, so you can discuss options such as a reconciliation.
What is the holdback on a merchant cash advance?
The holdback, also called the specified percentage or split, is the agreed share of your sales that you've sold to the funder. It's the basis for setting the payment amount. It doesn't change the total you deliver, which is the fixed purchased amount.