Payoff Letter
A payoff letter is the formal funder document specifying the exact amount required to satisfy an MCA advance in full as of a specified date — including any early payoff discount — providing definitive payoff figure for merchant satisfaction or refinancing transactions.
Why This Matters
Payoff letters serve dual purposes: enabling merchant-driven early payoff and supporting refinancing/consolidation transactions where the new funder needs definitive amount to satisfy existing debt. Standard payoff letter content: original advance amount, payments received to date, remaining payback, applicable early payoff discount, exact payoff amount as of specified date, payoff date validity (typically 7-14 days), wire instructions for payoff, and contact information for confirmation. Payoff letters typically issued within 1-3 business days of merchant request. Time-sensitive — payoff amounts change as additional daily payments process.
Frequently Asked Questions
Frequently Asked Questions
How quickly can merchants obtain MCA payoff letters?
Typically 1-3 business days from merchant request. Some funders offer same-day payoff letters via portal request; others require phone or email request with manual processing time. Most payoff letters valid for 7-14 days from issuance, after which a refreshed letter is required.
Does early payoff discount appear on the payoff letter?
Yes if the advance contract includes early payoff discount provisions. Discount calculation reflects time of payoff relative to original schedule. Some letters provide alternative payoff scenarios (immediate vs. 30 days from now) showing how discount changes with timing. Always verify discount calculation matches contract provisions.