How Do Merchant Cash Advance
Repayments Work?

The basics: automatic fixed withdrawals

Once your merchant cash advance is funded, repayment begins automatically. A fixed amount is withdrawn from your business checking account via ACH transfer, Monday through Friday (excluding bank holidays). There is no bill to pay, no payment date to remember, and no risk of a missed payment.

How is my daily withdrawal amount calculated?

Your daily withdrawal amount is determined at the time your offer is made. Here's the formula:

Daily Withdrawal = Total Repayment Amount ÷ Number of Business Days in Repayment Term

For example: if you receive a $50,000 advance with a factor rate of 1.30, your total repayment is $65,000. If your term is structured over 260 business days (approximately 12 months), your daily withdrawal would be $250.

This amount is clearly stated in your offer and agreement before you commit to anything.

Does the withdrawal amount change if my revenue changes?

For fixed ACH repayment structures — which is how Reeve Capital's Cash Distribution Partner operates — the daily withdrawal is fixed regardless of your revenue. This means your repayment is predictable and consistent.

Some MCA products use a "percentage of daily sales" model, where withdrawals fluctuate with revenue. Fixed ACH withdrawals are generally simpler to plan around since you know exactly what's coming out each business day.

What happens if there aren't enough funds in my account?

If a withdrawal fails due to insufficient funds, it's typically re-attempted the following business day. Repeated failed withdrawals can be a signal to your funder that the business is experiencing distress, and may trigger a conversation with your funding specialist.

The best practice is to maintain a buffer in your business checking account — at least enough to cover one to two weeks of daily withdrawals — so that normal revenue timing gaps don't cause failed ACH attempts.

Can I pay off my advance early?

This depends on the terms of your specific agreement. Some MCA agreements allow early payoff, sometimes with a discount on the remaining balance. Others have a minimum payback period. Your offer documents will clearly state the terms around early repayment.

Contact your funding specialist if early payoff is something you're considering — they can clarify exactly what your agreement allows.

When can I renew or get a second advance?

Most funders will consider you for a renewal once you've repaid 60% of your outstanding balance. At Reeve Capital, our team actively monitors accounts and reaches out when you qualify — you don't have to track it yourself.

Renewals are common. Many business owners use merchant cash advances as an ongoing working capital tool, renewing as they pay down their balance and their business continues to grow.