ACH Reversal
The cancellation or reversal of an ACH debit or credit transaction, typically initiated due to an error, insufficient funds, or an unauthorized withdrawal dispute.
When a scheduled ACH payment can’t be completed or is disputed, the transaction can be reversed, which unwinds the debit or credit, and in a lending context, a reversed payment generally still counts as missed until it’s successfully resolved or retried.
A high volume of reversals on a bank statement is another pattern underwriters watch for, similar to NSFs, since it can point to cash flow timing issues even if the business isn’t formally in default.
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