Welcome to Delancey Street. If you're reading this, you've probably already seen the NSF fees hitting your bank account and you're trying to figure out what's happening, how bad it gets, and whether there's a way to stop it. Let's break it down.

What Is an NSF Fee on an MCA?

NSF stands for non-sufficient funds. You already know that. But here's what most business owners don't realize: when your MCA lender sends their daily ACH debit and your account doesn't have enough to cover it, two separate entities charge you.

Your bank charges you an NSF fee. Usually $25 to $35 per occurrence. That's the fee everyone knows about.

But the MCA lender also charges you a returned payment fee. This is buried in your merchant cash advance agreement, and it's usually somewhere between $35 and $50 per failed debit. Some lenders charge more. Some lenders don't cap it at all.

So one failed daily payment costs you $60 to $85. And they're going to retry it. Which means that same failed payment becomes $120 to $255 in fees within a few days — for a single day's ACH that didn't go through.

Why MCA Lenders Keep Retrying the ACH

This is by design. The MCA lender doesn't retry because they think you suddenly have money in the account. They retry because every failed attempt strengthens their position. Here's why:

  • Each retry generates documented evidence of non-payment
  • Each retry adds fees to your balance (fees you now owe them)
  • The pattern of failed ACH debits gives them grounds to accelerate your entire balance — meaning everything you owe becomes due immediately

You think they're just trying to collect the daily payment. They're not. They're building a paper trail to justify accelerating the full purchased amount. And they're profiting from the fees along the way.

How Fast NSF Fees Add Up

Let's do the math, because this is where it gets ugly.

Say your daily MCA payment is $500. Your account comes up short on Monday. Here's what a single week looks like:

  • Monday: ACH fails. Bank charges $35 NSF. Lender charges $45 returned payment fee. Total: $80.
  • Tuesday: Lender retries Monday's debit. Fails again. Another $80. And Tuesday's regular debit also fails. Another $80. Total for the day: $160.
  • Wednesday through Friday: Same cycle. Retries stacking on top of new debits. Each one failing. Each one generating fees.

By Friday you've got $500 to $800 in fees on top of the payments you already couldn't make. And you haven't even missed a full week yet. The lender hasn't called yet. The acceleration notice hasn't landed yet. This is just the fee layer.

Can You Stop the NSF Fees?

This is where business owners get themselves in real trouble. The instinct is to block the ACH, close the bank account, or switch to a new account. Do not do this. Under virtually every MCA agreement, blocking or reversing an ACH debit is an immediate event of default. Closing your bank account is an event of default. Moving your deposits to a new account is an event of default.

You're trying to stop the bleeding and instead you just gave them the legal justification to come after everything — the full balance, attorney fees, default fees, and in some cases a confession of judgment (in states that still honor them) or a restraining order that freezes your personal and business bank accounts within hours.

The NSF fees are bad. But the consequences of trying to dodge them on your own are worse.

What Most People Get Wrong About MCA NSF Fees

There's a misconception that these fees are negotiable, or that your bank will waive them if you explain the situation. Some banks will waive one or two NSF fees per year as a courtesy. But when you've got multiple failed debits per day, the bank stops being sympathetic pretty fast. You're not their problem. The MCA lender is your problem.

And here's the other thing nobody tells you: the MCA lender is adding every single one of those returned payment fees to your outstanding balance. So the amount you owe is growing because you can't pay, which makes it even harder to catch up. It's a compounding problem, and that's not an accident. The MCA agreement is written to make sure the lender profits from your inability to pay.

What You Should Actually Do

If you're already seeing NSF fees stack up, you're in the early stage of what can become a much worse situation very quickly. The lender's collections team hasn't started calling yet (or maybe they just started). The UCC liens haven't been enforced yet. The acceleration notice hasn't been filed yet. You still have a window.

Don't block the ACH. Don't close the account. Don't take on another MCA to cover the payments on the first one (that's called stacking, and it's an event of default on both agreements). Don't ignore the calls.

What you should do is talk to someone who understands how these agreements actually work — not your regular business attorney, not your CPA, not the broker who sold you the deal. Someone who negotiates with MCA lenders specifically, because the leverage points in these agreements are not obvious and the timeline is extremely compressed.

At Delancey Street, we've unwound thousands of these situations. We're attorney-owned, we know how MCA lenders operate from the inside, and we know exactly which levers to pull before the situation escalates past the point where negotiation is still an option.