The MCA reconciliation clause: how to check and request an adjustment
Reconciliation is a contractual process for comparing remittances with the agreed share of actual revenue. The formula, eligibility, records, deadlines, and available adjustments depend on your agreement.
Updated
Sources and scope
- New York Courts: Davis v. Richmond Capital Group (2021) — Checked September 18, 2026. A pleading-stage decision, not a finding that every MCA is a loan or every reconciliation refusal proves a defense.
Read the calculation before requesting relief
Identify the defined revenue, specified percentage, measurement period, and treatment of refunds or credits. Distinguish a backward-looking reconciliation from a change to future debits.
Prepare the request
Follow the notice method and document requirements in the contract.
- Locate the clause and any amendments
- Calculate the relevant revenue and remittances for the same period
- Collect the requested bank and processor records
- Send the calculation and request to the specified address
- Keep delivery evidence and calendar any stated response period
If the response is disputed
Keep the request, supporting records, and response. Davis v. Richmond Capital Group allowed certain allegations concerning reconciliation and loan characterization to proceed at the pleading stage. It did not establish that every refusal proves an unlawful loan.
Do not confuse a request with an approved change
A submitted request does not itself authorize you to stop paying or change debits. Ask for the calculation and any approved adjustment in writing. Review a new agreement for added fees, guarantees, or waivers.
Common questions
Does every MCA have this clause?
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Do not assume so. Read your agreement and ask counsel about missing, discretionary, or disputed provisions.
Does requesting reconciliation prevent default?
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The request does not automatically waive other obligations or resolve an existing claimed breach. Check the contract and obtain advice if default is disputed.
Does a 40 percent revenue drop mean a 40 percent payment cut?
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Not necessarily. The defined revenue, comparison period, prior collections, and contractual formula determine the calculation.
Use the contract’s formula and procedure. No universal cost, response time, payment reduction, or legal outcome is promised.
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