Daily Remittance | MCA Glossary

Definition

The amount transferred from a business to an MCA funder each business day, representing the day's holdback collection toward the total purchased amount.

Explanation

Daily remittance is the operational mechanism through which MCA repayment happens. Each business banking day, an amount is transferred from the business to the funder — either through an automated card-split at the payment processor or through an ACH withdrawal from the business bank account. In card-split arrangements, the daily remittance varies with actual card sales volume. A day with $4,000 in card sales and a 15% holdback generates a $600 remittance; a day with $1,500 in card sales generates a $225 remittance. The variability is automatic and requires no intervention from either party. In ACH-based arrangements, the daily remittance is a predetermined fixed amount, typically calculated by dividing the projected total holdback collections by the number of business days in the estimated repayment period. This fixed amount is withdrawn regardless of actual daily revenue, which creates the cash flow risk for businesses with variable or seasonal revenue.

Example

A business with a $90,000 purchased amount and a 15% holdback averaging $600 per day on $4,000 in daily card sales will complete repayment in approximately 150 business days — roughly 7 months. Each day, $600 in daily remittance reduces the outstanding balance.

Why It Matters

Understanding your daily remittance amount is essential for cash flow planning. When your bank account balance drops each morning or evening by the remittance amount, those funds are permanently committed to advance repayment. Building your operating budget around the post-remittance cash balance — not the pre-remittance balance — prevents the common error of overcommitting daily spending when MCA payments are active.

Frequently asked questions

Does daily remittance happen on weekends?

ACH-based remittances process only on business banking days, so Saturday, Sunday, and federal bank holidays are excluded. However, some card-split arrangements process settlement on non-banking days if the payment processor batches and settles on those days. Check your specific agreement and payment processor settlement schedule to understand exactly which days remittances occur.