Guide · If you already have an advance
You paid off your merchant cash advance and the funder is still debiting your account. What do you do?
By Alex Makowski Published
Contact the funder in writing the same day, with proof of the payoff, and demand the debits stop and the overpayment be refunded. Call your bank at once about stopping further debits and disputing the ones taken, and send the funder a written demand to terminate its UCC filing, which it must answer within 20 days.
In this guide
- 01Why it happens, and why it is not a small thing
- 02What to do, in order
- 03How to avoid it on the next payoff
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01
Why it happens, and why it is not a small thing
Most often it is a system that was not told: the payoff was received but the scheduled debits kept running. Sometimes it is not an accident. The FTC alleged in 2020 that Yellowstone Capital withdrew hundreds or thousands of dollars from businesses for days after they had repaid in full, and refunded it only when they complained, sometimes weeks or months later. The company settled.
Either way it is your money, and on a daily debit it adds up quickly. Act the day you see it.
02
What to do, in order
Stopping debits on an agreement that is genuinely paid is not the same as revoking them on one that is not. If there is any doubt about the balance, settle that first with the payoff letter; revoking authorization on a live advance is usually a default.
- Pull the proof: the payoff letter, the final payment, and the statement lines for every debit after it.
- Email the funder the same day. Say the balance was paid in full on that date, list the debits taken since, and ask for the debits to stop, the overpayment to be refunded, and a paid-in-full letter. Keep it in writing.
- Call your bank. Ask what it can do to stop further debits from that company and what window it allows for disputing the debits already taken. Business accounts can have shorter dispute windows than personal ones, so do not wait for the funder to reply.
- Send a written demand for a UCC termination statement. Under UCC § 9-513(c), once nothing is owed, the funder must file a termination or send you one within 20 days of receiving an authenticated demand.
- If the funder does not respond or refuses, report it to your state attorney general and the FTC, and keep every document.
03
How to avoid it on the next payoff
Before the final payment, get a payoff letter that states the exact amount and the date it is good through, and ask the funder to confirm in writing the date the last debit will run.
If a new funder is paying the old one off in a consolidation, the payoff letter is part of that process. Check your account for the next several business days after funding, and if the old funder debits again, use the steps above.
Once the termination is filed, the lien is gone from the public record, which matters the next time a funder or a bank searches it.
Written by
Alex Makowski, Owner
Alex Makowski owns and runs Business Loans for America and has been placing funding for U.S. small businesses since 2021. Businesses he has worked with have secured $50M+ in financing across 1,200+ placements. He writes and reviews every guide on this site.
FAQ
Related questions.
- How long does a funder have to release its UCC filing after payoff?
- Under UCC § 9-513(c), 20 days after it receives an authenticated demand from you, once nothing secured by the filing is owed. Send the demand in writing; the clock runs from the demand, not from the payoff.
- Can I just stop the payments at my bank?
- If the advance is paid in full, asking your bank to block that company's debits is reasonable, and you should do it alongside the written demand. If anything is still owed, a stop is usually a default under the agreement.
- Who do I report a funder to?
- Your state attorney general and the FTC, which brought the Yellowstone case over exactly this practice.
Guides
More on if you already have an advance
If you are behind on an advance
The order to do things in, what not to do, and which guide answers your exact situation.
Consolidating your positions
One new advance pays off the old ones. One debit instead of three, and the total it adds, worked through.
Reverse consolidation
The old advances stay open and a new funder covers their debits. Breathing room, at a price.
Refinancing with an SBA or bank loan
Not while the advance is still running. What SBA's October 2026 rule allows, and what a bank reads instead.
"Take the advance, we'll refinance you later"
Nothing makes the later loan happen, and the advance itself makes it harder to get.
The offer changed after statements
What underwriting legitimately changes, and the signs it was never a real offer.
Sources
- FTC — Merchant cash advance provider alleged to have overcharged small businesses millions (Aug 2020)The FTC's complaint against Yellowstone Capital, alleging withdrawals from businesses' accounts for days after they had repaid in full.
- Cornell LII — UCC § 9-513, Termination statementThe model-code rule that a secured party must file or send a termination within 20 days of a debtor's authenticated demand once nothing is owed.
- FTC — Report FraudWhere to report advance-fee and business-funding scams.
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