How to withdraw the authorization that lets a funder pull from your account — what it does, what it does not do, and the letter your bank actually needs.
This one has teeth pointed both ways. Revoking an ACH authorization stops money leaving
your account. It does not cancel the underlying agreement, it does not reduce what you owe,
and in most merchant cash advance contracts blocking the debit is itself an event of default —
which can trigger acceleration, personal-guaranty enforcement, and a UCC notice to the
processors and customers named in your file. Do not send this because a payment is
inconvenient. Send it when you have decided, deliberately and preferably with a lawyer, that
stopping the bleed is worth the consequence. If the problem is affordability rather than
fraud, read what to do when you are already
behind first — reconciliation, if your contract has it, is the door that does not blow up
the agreement.
Two things have to happen, and people usually only do one. You revoke the authorization with
the company (this letter), and you place a stop-payment order with your bank. The bank
does not know what you told the funder. The funder cannot un-send a debit the bank will honor.
Read this first. MCAFax is not a law firm and this is not legal advice. These are
starting points written in plain language — facts, dates and dollar figures are yours to fill in,
and every claim you make in a letter should be one you can prove. If real money is on the line,
or if anyone has threatened suit, have a lawyer in your state read it before you send it.
1. To the funder
[DATE][YOUR NAME][YOUR BUSINESS NAME][YOUR MAILING ADDRESS][FUNDER / COMPANY NAME][COMPANY ADDRESS]
Re: Revocation of ACH debit authorization — agreement [AGREEMENT OR ACCOUNT NUMBER]
To whom it may concern,
Effective immediately, I revoke any and all authorization previously given to
[COMPANY NAME], its affiliates, agents, servicers, and assignees to
initiate automated clearing house (ACH) debits, remotely created checks, card
debits, or any other electronic withdrawals from any account of mine or of
[YOUR BUSINESS NAME], including account ending [LAST 4] at
[BANK NAME].
This revocation applies to all future entries, whether recurring or one-time, and
to any authorization signed or claimed in connection with the agreement referenced
above. Do not originate any further entry against this or any other account of
mine. I have separately instructed my bank to refuse further entries from you.
I am not disputing that the agreement exists, and this letter is not a statement
that no amount is owed. I am revoking the electronic debit authorization only. I
am available to discuss [WHAT YOU WANT: reconciliation, a revised schedule, a payoff figure]
in writing at the address above.
Please confirm in writing, within five business days, that all debit
authorizations have been cancelled and that no further entries will be
originated.
[YOUR NAME][TITLE, e.g. Owner / Managing Member][YOUR BUSINESS NAME]
2. To your bank, the same day
Call the business banking line, then follow it in writing. Banks need the originator name
exactly as it appears on the statement — not the brand on the contract, which is often
different. Read it off a real debit line before you call. Ask specifically for:
A stop payment on all future entries from that originator, not a single-item stop.
Single-item stops expire and are trivially defeated by a one-cent change in the amount.
Written confirmation of the stop, its scope, and its expiration date — most stops expire,
commonly around six months, and a lapsed stop is how the debits come back.
Whether the bank recommends closing the account and opening a new one. For a debit that
keeps returning under new originator names, that is frequently the only thing that works.
Plan the switch first: payroll, processor deposits, card settlement and every autopay have to
move with it.
Expect fees for stop payments and for returned entries, and expect the returns themselves to
be visible to anyone who later underwrites you. That is part of the cost of this decision.
What comes next, honestly
A blocked debit usually produces a phone call within a day and a default letter within a
week. Sometimes it produces a settlement conversation you could not get while the money was
flowing, which is exactly why some owners do it. Sometimes it produces an accelerated balance
and a suit against the guarantor. Which one you get depends on the funder, the size of the
balance, and what your agreement says — which is why you read
the contract, clause by clause before you
send this, not after.
Getting the calls? Shut it down.
Check a broker, then use the finance skill in your own AI. MCAFax has no user accounts and no sign-up.