Writing an MCA Hardship Letter | Fintiex
How to write a calm, factual hardship letter to a merchant cash advance funder, what to include, and what to leave out.
A hardship letter is a short, written explanation sent to a funder when the business can no longer keep up with payments as agreed. Done well, it sets a respectful tone for whatever comes next. Use this as orientation; it is not a substitute for legal or financial advice.
What a hardship letter is for
It explains what changed, shows the effect on sales, and asks the funder to discuss options. It is a starting point, not a legal document, and it does not change the agreement by itself. If you are weighing bankruptcy as well, see MCA and bankruptcy.
A short example of the situation
A bakery loses its largest wholesale customer. Sales drop, and the daily debit that felt manageable now empties the account by midweek. The owner has called the funder twice, but nothing has been put in writing. A hardship letter turns those calls into a clear record: what happened, when, what the numbers show, and what the owner is asking for.
What to include
- The business name, agreement details, and your contact information
- A brief, honest description of what happened
- Recent bank statements or sales figures that support it
- What you are asking for, such as a review under a reconciliation clause or a temporary payment change
- A request that replies come in writing
A simple structure that works
- Open with who you are and which agreement you mean
- Describe the change in two or three plain sentences
- Point to the attached statements rather than retelling every figure
- State the request and the payment the business can actually carry
- Close by asking for a written reply and naming the best way to reach you
Keep it to one page if you can. Funders read many of these, and a short letter with good attachments is easier to act on than a long one.
What to leave out
Avoid promises you cannot keep, admissions you have not thought through, and emotional language. Keep it factual and short. If a lawsuit or judgment is already involved, have a licensed attorney look at the letter before sending it.
After you send it
Keep a copy, note the date, and log any calls that follow, as described in MCA collection calls. Responses vary, and a funder is not obliged to agree.
What to watch for
Read any reply closely before you act on it. If the funder sends an amendment, check for new fees, a new guarantee, or a changed schedule. Keep making whatever payments you agreed to while the request is reviewed, unless an adviser tells you otherwise. And if no reply comes, a short, polite follow up in writing is usually better than silence. Note the date of each follow up in the same log.
Soft next steps
If writing the letter feels overwhelming, Coastal Debt is a team that helps owners communicate with funders and can talk through what to say. More guides sit in the business credit hub, and a professional who has read your documents can say what applies.
Frequently asked questions
What is an MCA hardship letter?
A short written explanation to a funder that describes a change in the business and asks to discuss options.
Does a hardship letter change my agreement?
No. It starts a conversation but does not change terms by itself.
What should I include?
Business details, what happened, supporting statements, what you are asking for, and a request for written replies.
What should I avoid?
Promises you cannot keep, unconsidered admissions, and emotional language.
Should a lawyer review it?
If a lawsuit or judgment is involved, having a licensed attorney review it first is wise.
Will the funder agree?
Not necessarily. Responses vary by funder and situation.
What should I do after sending it?
Keep a copy, note the date, and log any follow up calls.
Does this explain my own situation with MCA hardship letter?
No. It is general background. A licensed professional can look at your documents.
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