Reconciliation Clause
A contract provision entitling the merchant to have the fixed daily MCA payment adjusted, reconciled, to match the agreed percentage of actual revenue. If revenue drops 40 percent, a proper reconciliation drops the payment roughly 40 percent and credits past over-collection.
Why it matters
The clause exists because it protects the funder's legal position: true purchases must track real revenue. Most owners never invoke it. A written reconciliation request with bank statements attached is free, is not a default, and forces a useful choice: honor the clause or create evidence for a recharacterization argument.
Go deeper
