MCA Deferment
Deferment formally postpones MCA payments to specific future date — distinct from forbearance (general pause) by having explicit start date and resumption date — used for predictable temporary cash flow gaps like seasonal slowdowns or planned business transitions.
Why This Matters
Deferment mechanics: payment obligation postponed to specific future date (e.g., payments deferred 60 days, resuming on specific date); principal balance preserved; full original terms resume on resumption date; interest/factor cost may accrue during deferment period depending on funder policy. Common deferment use cases: seasonal businesses requesting deferment during off-season, businesses transitioning to new locations, businesses awaiting documented receivables collection, or businesses navigating temporary supply chain disruptions with clear resolution timelines.
Frequently Asked Questions
Frequently Asked Questions
When is deferment more appropriate than payment modification?
Deferment fits short bounded gaps with clear resolution timeline; payment modification fits ongoing reduced cash flow capacity requiring permanent restructure. Wrong choice creates merchant frustration and operational complexity.
Does deferment cost merchants more in factor cost?
Funder policies vary. Some funders preserve original total payback through deferment (no additional cost). Others extend factor accrual through deferment period adding cost. Term sheet review at deferment grant clarifies treatment.