What MCA reconciliation means
Reconciliation, sometimes called a true-up, compares collections with the revenue basis specified in a sales-based financing agreement. New York’s Financial Services Law definition includes arrangements that use fixed payments with a reconciliation process to adjust them to a percentage of sales or revenue. [1] That definition provides useful context; it does not determine the terms or legal treatment of every agreement nationwide.
Locate the sections describing the purchased percentage, the revenue being measured, and any adjustment procedure. Ask whether collections vary directly with sales or begin as an estimated fixed amount. Then identify whether a review is automatic, scheduled, or requires a request from your business.
Why the written process matters
The FTC’s February 2020 staff perspective identified concerns about providers failing to perform promised reconciliations when merchants’ sales declined. Its August 3, 2020 guidance also addressed the importance of honoring promises about reduced-revenue payment adjustments. [2][3] These are longstanding publications, not a new policy announcement or a promise that your own request will produce a particular result.
GoodToGo Capital’s practical recommendation is to check the procedure before accepting funding and revisit it promptly if revenue changes. Ask who handles requests, how to submit one, what period is reviewed, and how receipt will be confirmed. Keep the agreement and the provider’s written explanation together so you can compare the response with the actual terms.
Compare the same revenue period and definition
A simple hypothetical illustrates the calculation. If an agreement uses 10% of defined receipts for a particular month, $40,000 of those receipts corresponds to $4,000. If the same defined receipts for a comparable month are $25,000, 10% corresponds to $2,500. The difference is $1,500. This example assumes those amounts and that percentage; it is not an offer, a typical rate, or an entitlement to an immediate refund.
Ask the provider how its actual calculation handles the review dates, refunds, transfers, and receipts received through different channels. Do not compare a partial month with a complete month or assume that every bank deposit is sales revenue. Request a breakdown of the receipts used, the percentage applied, and the collections already credited for that period.
Prepare a focused reconciliation request
Gather the signed agreement, relevant business bank statements, payment-processor reports, and a list of the provider’s withdrawals for the review period. Include a short explanation of the sales change and any differences between bank deposits and the agreement’s revenue measure. Send records through the provider’s established secure channel.
State which contractual process you are asking it to apply and request a written calculation. Ask what happens to scheduled withdrawals while the request is being reviewed, when a decision is expected, and whether an adjustment would affect future collections, prior collections, or both. Do not budget around a changed amount until the provider confirms what will happen.
Confirm the outcome and plan the next step
If an adjustment is confirmed, record the effective date, revised withdrawal amount, and any credit or refund. Ask whether the total remaining contractual obligation changes or only the collection schedule, and when another review may be needed. Check the subsequent transactions against that confirmation.
If the response is unclear, ask the provider to identify the relevant agreement provision and explain its calculation. For a disputed obligation or questions about legal rights, obtain qualified advice specific to the agreement. GoodToGo Capital can help you explore merchant cash advance options and the questions to raise before accepting an offer; provider requirements and written terms govern each transaction.
Sources
- New York State Senate — Financial Services Law § 801(j), sales-based financing definition; current text accessed October 25, 2026
- FTC — Strictly Business Forum Staff Perspective, February 2020, discussion of reconciliations on page 7; accessed October 25, 2026
- FTC — Protecting small businesses seeking financing during the pandemic, August 3, 2020; accessed October 25, 2026
General educational information. Consider your business’s circumstances and the written terms of any offer.