Automatic debits
Most business financing is repaid by automatic ACH debits from your business checking account. The authorization is short, but it decides which account is touched, when, and what happens on a bad day.
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Updated October 13, 2026 · Merchant Fund Express
An ACH authorization lets the funder pull scheduled payments from a named bank account. Before you sign it, get clear written answers on six things: which account, what amount, which days, what happens if a debit fails, how to change the account or the day, and how debits stop when the balance is paid. Those answers matter more on a slow week than on the day you sign.
| Question | Why it matters |
|---|---|
| Which account? | Use the account where sales are deposited. Debiting a different account means moving money every day by hand. |
| What amount, and is it fixed? | Fixed ACH, or a percentage of sales? See split funding vs fixed ACH. |
| Which days? | Every business day, or a named weekday? What happens on bank holidays? |
| What time does it post? | Early-morning debits hit before most same-day deposits arrive. |
| What if a debit fails? | Fee in the agreement, retry timing, and whether two failures change anything |
| Can I change the day or account? | Notice period, form needed, and whether the funder must approve |
| Will any other amount be debited? | Fees, catch-up amounts or a payoff, and whether you get notice first |
| How do debits stop? | Automatically at the final payment, and after a payoff letter is satisfied |
Assumptions: a restaurant pays a $1,750 weekly debit. Card settlements for weekend sales land Monday and Tuesday; supplier payments go out Monday. Opening balances before the debit, week of November 2, 2026:
| Day | Balance before debit | If the debit is on this day | Note |
|---|---|---|---|
| Mon Nov 2, 2026 | $2,900 | $1,150 after a $1,750 debit | Supplier ACH of $1,600 the same day would leave −$450 |
| Tue Nov 3 | $5,600 | n/a | Weekend card settlements have landed |
| Wed Nov 4 | $7,200 | $5,450 after a $1,750 debit | Comfortable cushion |
| Fri Nov 6 | $6,100 | n/a | Payroll goes out |
With a Monday debit, this business risks a negative day every week. Moving the debit to Wednesday costs nothing and keeps the balance above the $800 minimum daily balance that the published Tier 2 sheet uses. Negative days also show up on your next application; see negative days and NSFs.
All figures in worked examples are illustrations of the arithmetic, not offers or quotes. Real terms depend on your file and the funder.
Most agreements let you change the debit account, but only with notice and the funder’s agreement, and a new account must be one that receives your sales. Never close the debit account or block the debits on your own; that can be treated as a breach. The steps are covered in changing bank accounts with an MCA. For holiday handling, see ACH debits and holidays.
A voided check or bank letter for the debit account, the signed authorization, and about 3 months of business bank statements as PDFs that show that account’s deposits. Keep a copy of the signed authorization with your agreement, along with the payment schedule.
If you are comparing offers, put the debit day and frequency next to the total payback for each. Then use the payment burden calculator to see what share of a normal week each payment takes. When the numbers fit, start the application.
Only as the agreement allows. Read the clauses on fees, missed payments and default. Ask for notice before any amount other than the scheduled payment.
Your bank may let you, but stopping authorized debits without the funder’s agreement can breach the contract. Talk to the funder first.
It depends on how your deposits arrive. Weekly fits businesses paid in weekly cycles; daily fits steady daily card sales. See daily vs weekly.
The date of the last scheduled payment, or the date a payoff clears. Check your bank for any debit after that and ask for it back.
Same-day decision. Applying takes a few minutes and will not affect your credit score.
