Reconciliation Clause

Since an MCA’s holdback is meant to represent a percentage of revenue, a reconciliation clause lets the business request a review, often monthly, to true-up the fixed remittance amount that was estimated at the start against what a true percentage-based holdback should actually be for that period.

Without a reconciliation clause, a fixed daily debit amount set at the beginning of the advance may not adjust automatically if revenue drops, so understanding whether, and how often, an agreement allows reconciliation is a meaningful factor when comparing MCA offers.