Which funding products does this apply to?

Merchant Cash Advance, Credit Card Processing. Each has its own page listing the funders in this directory that offer it and what each one publishes about its terms.

Is this specific to restaurants?

It is written around how a restaurant business actually generates and collects cash, which is what makes its funding problem different. The mechanics transfer; the arithmetic may not.

The Find Me Funders research desk. Some drafting is AI-assisted, and every page that is says so at the top, including whether a person has checked its claims yet.

How do I know a figure here is right?

Where a page carries the green notice, its claims were checked against the sources listed at the end and a reviewer is named. Where it carries the amber one, nobody has verified it yet and you should confirm anything you plan to act on.

Are the examples real deals?

No. Every worked example is labelled illustrative and exists to show the arithmetic. What any particular lender charges is on that lender's page, where it publishes it.

Why do you never say what a typical rate is?

Because we cannot source it. A market average assembled from lenders who do not publish prices is a guess with a decimal point on it. Where a lender publishes a figure, we show that figure and say where it came from.

Is this financial or legal advice?

No. It is general information about how these products work. Outcomes depend on your contract and your state, and a lawyer or accountant licensed where you are is the person to ask about your situation.

Can I reuse this content?

Quote a paragraph with a link back. Do not republish whole articles.

Split funding, lockbox and ACH on an MCA compared

Q: What is the difference between split funding, a lockbox and ACH collection on a merchant cash advance?

**Split funding** takes the funder's share out of card settlements at the processor before the money reaches you. A **lockbox** routes all your deposits into a controlled account the funder can access first, then forwards the remainder. **ACH** simply debits your operating account on a schedule. ACH is the most common and leaves you holding your own cash; a lockbox gives you the least control and is the hardest arrangement to unwind.

Split funding, lockbox and ACH collection compared

Three ways a funder can get its share, ranked by how much control over your own money you keep.

By Find Me Funders research desk Updated 14 September 2026 982 words 4 min read

Drafted with AI assistance. Not yet independently checked. Nobody has verified the claims on this page against a source, so treat the figures and legal points as a starting point rather than as settled, and confirm anything you are about to act on. How we check things.

What is the difference between split funding, a lockbox and ACH collection on a merchant cash advance?

Split fundingtakes the funder's share out of card settlements at the processor before the money reaches you. A lockbox routes all your deposits into a controlled account the funder can access first, then forwards the remainder. ACH simply debits your operating account on a schedule. ACH is the most common and leaves you holding your own cash; a lockbox gives you the least control and is the hardest arrangement to unwind.

Split funding

The card processor divides each settlement batch, sending the specified percentage to the funder and the rest to you. It happens before the money touches your account.

What it does well.It genuinely tracks volume. Slow week, smaller remittance, no request required. It is the collection method that most closely matches what the contract describes.

What to watch.It ties you to a processor. Switching processors mid-deal is usually an enumerated event of default unless you get written consent first, and the consent process can take longer than the switch you were trying to make. Some arrangements also involve the funder being added to your processor account, which means a third party has visibility and, sometimes, standing with your processor.

Lockbox

Your receipts — card settlements, cheques, transfers, sometimes everything — are directed into a deposit account the funder controls or has rights over. The funder takes its share and remits the balance to your operating account, usually daily.

What it does well.From the funder's side, essentially everything. It is the strongest position they can hold short of a judgment.

What to watch.You are now downstream of somebody else on your own revenue. If a remittance is late, delayed by a weekend, or held because of a dispute, your payroll waits. Customers may be given new banking instructions, which is awkward to reverse and awkward to explain. Unwinding it after payoff takes cooperation you may not have. If a deal is offered on lockbox terms, understand that the structure itself is telling you how the funder prices your risk.

ACH debit

The funder pulls a fixed amount from your operating account on a schedule under an authorisation you signed at closing.

What it does well.It is simple, it is cheap, it works for businesses with no card volume, and the money passes through your hands first. You retain the practical ability to see what is happening and to act.

What to watch.The debit is fixed and does not fall when sales do — the specified percentage only reasserts itself through reconciliation. Failed debits generate NSF charges on both sides, and repeated failures are typically an event of default. The authorisation you signed is broad; read what it permits as to amount and frequency, and what notice, if any, is required before a change.

The same deal under two mechanics

Illustrative only — 60,000 to deliver. Sales run 5,000 a day, of which 3,000 is card volume. A split takes 15% of card settlements: 450 a day. An ACH alternative is set at a fixed 600 a day.

In a normal 22-day month the split delivers 9,900 and the ACH delivers 13,200. The split takes about 6.1 months to finish; the ACH takes about 4.5.

Now card volume drops 40% for a month. The split takes 270 a day, 5,940 for the month, and the term simply extends. The ACH takes 13,200 regardless, out of an account that received substantially less. Same contract value, same funder, and the difference between the two months is whether the business or the funder absorbs the downturn.

That is the trade in one paragraph. The split costs you more months of the arrangement and more total time under a processor restriction. The ACH finishes sooner and puts every bad week on your side of the line.

What a failed debit costs

Illustrative only — three returned debits in a month at 35 charged by the funder and 30 charged by your bank is 195 in fees on payments that did not happen. The money is not the real cost. Most agreements make a stated number of returned payments an event of default, and a default on a daily-debit product usually accelerates the entire uncollected balance.

Two defences, both written before funding: ask what the returned-payment fee is in dollars and how many returns constitute a default, and ask whether the funder will re-present a failed debit automatically, which can turn one shortfall into two fees in a week.

Changing bank or processor mid-deal

Assume you cannot without written consent, then check.

On a split, moving processors usually requires the funder's consent and a new split instruction with the new processor. Start four weeks out. A switch completed before the consent is an enumerated default in most agreements.
On a lockbox, your customers have the account details. Changing anything means telling them twice and living with payments arriving in two places for a month.
On ACH, the authorisation is tied to specific account details. Opening a new account and letting the old one fail is not a neutral act; it reads as an attempt to avoid the debit and is treated accordingly.

Getting it switched off at the end

Delivery of the purchased amount does not automatically dismantle the plumbing. The split instruction sits with the processor until someone releases it. The ACH authorisation survives until it is revoked. The lockbox account keeps receiving your customers' money until they are told otherwise.

Ask for three confirmations in writing on the day of final payment: that the processor instruction has been released, that the ACH authorisation is cancelled, and that a UCC-3 termination has been filed. Then check the next settlement yourself.

Choosing, and living with it

If you have a choice, ACH keeps the most control and split funding keeps the closest link to actual volume. A lockbox should prompt a hard second look at whether the deal makes sense at all.

Whichever applies, get three things in writing before funding: exactly what you must do before changing bank or processor, exactly what happens to the arrangement the day the purchased amount is delivered in full, and who terminates the processor instruction or the lockbox and how long it takes. Collection mechanics are easy to set up and slow to dismantle.