Audit your MCA contract in 7 steps
A step-by-step checklist to find hidden fees, APR red flags, and clauses you can challenge.
Start with the paperwork
Work through the steps in order. Each one builds on the last — by the end you'll have a clear picture of your APR, your fee exposure, and which clauses create leverage.
This playbook is designed to be completed in one sitting with your contract in front of you. Expect to spend 45–60 minutes. If you get stuck on any step, that's usually where the real leverage is — and where a free attorney review will pay off quickly.
The audit
- 1
Gather every document
Pull the signed MCA agreement, the funding authorization, the ACH/debit authorization, any addenda or renewal paperwork, and the bank statements showing deposits and daily debits. If you stacked advances, collect all of them — each contract interacts with the others.
- 2
Confirm the numbers
Verify the stated advance amount against what actually landed in your account (after origination, wire, and third-party fees). Confirm the stated payback amount, factor rate, and daily/weekly payment. Small mismatches often signal bigger disclosure problems.
- 3
Back out the real APR
Divide total payback by your daily payment to estimate the term in business days, convert that to years, and compute (payback ÷ advance − 1) ÷ term. Use our MCA APR Calculator as a shortcut. An APR over 50% is common; over 100% means you have real leverage.
- 4
Inventory every fee
List every fee named in the contract: origination, underwriting, ACH, NSF, blocked-payment, early-termination, reconciliation, and renewal. Fees buried in side letters or "servicing schedules" are a red flag — the law in most regulated states requires them in the main disclosure.
- 5
Read the reconciliation clause
A legitimate MCA is a purchase of future receivables, not a loan — which means the daily payment must reconcile to your actual sales. If the contract lacks a reconciliation right, or if the funder has denied reconciliation requests, that is a recharacterization argument your attorney can use.
- 6
Flag the enforcement tools
Look for confessions of judgment, personal guarantees, UCC lien filings, cross-default clauses, and merchant bank-account control (sometimes called a "lockbox"). These are the tools funders use to escalate. Knowing which apply to you determines what leverage you have.
- 7
Score the contract & decide
With the APR, fee inventory, reconciliation status, and enforcement posture in hand, you can decide whether to negotiate directly, bring in counsel, or trigger a state-law disclosure complaint. Our team can run this audit with you and recommend the path with the highest leverage.
Clauses & terms that raise alarms
If you find any of these in your contract, flag the page and note it for your attorney or advisor.
- Factor rate above 1.40 paired with a payment term under six months
- Origination or "underwriting" fee above 5% of the advance
- No reconciliation clause, or reconciliation only "at funder discretion"
- Confession of judgment in New York (or any state where enforceability is contested)
- Personal guarantee from the owner for what is marketed as a business-only product
- Automatic renewal or "refinance" triggers that roll the existing balance into a new contract
- Missing or vague estimated APR disclosure in a state that requires one (CA, NY, TX, VA, UT, and growing)
- Blocked-payment or NSF fees stacked daily — $35+ per failed debit compounds fast
Want us to audit for you?
Our attorneys run this audit for business owners every day — and we know where funders bury the fees. A free review covers the APR calculation, a fee inventory, and a plain-English summary of the enforcement clauses working against you.
Request a free auditStop guessing — start auditing.
Fifteen minutes on the phone usually tells you whether you have leverage.
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