Merchant Cash Advance Ledger

Introduction

Merchant Cash Advance (MCA) and Revenue-Based Financing (RBF) are vital lifelines for small businesses. However, the operational complexity of these lending products is high. Unlike a standard term loan with fixed monthly payments, MCA repayments fluctuate daily based on the merchant's sales volume.

NAYA offers a specialized ledger infrastructure designed to handle the variability and velocity of revenue-based financing.

The Operational Challenge

Managing an MCA portfolio requires tracking three dynamic variables every single day:

1. Merchant Revenue: Ingesting sales data from sources like Stripe, Square, or bank feeds.
2. Remittance Calculation: Applying the "Split Percent" to determine how much to collect.
3. Collection & Allocation: Pulling the funds via ACH and allocating them to principal reduction vs. fees.

Doing this manually on spreadsheets limits you to a handful of deals. Scaling to hundreds of merchants requires automation to prevent leakage and fraud.

The NAYA Solution

NAYA provides a unified data and ledger foundation that automates the entire lifecycle of an advance.

1. Dynamic Repayment Logic

NAYA's ledger is programmable. Instead of static schedules, you define logic: Daily Collection = Daily Revenue * Split %

• Automated Calculation: Feed daily revenue numbers into NAYA, and the system automatically calculates the expected repayment.
• Split Payments: If you split the daily sales with the merchant (e.g., 10% to you, 90% to them), NAYA tracks both the gross revenue and your net collection.
• Cap Management: Ensure you never over-collect. NAYA stops collections automatically once the 'Total Repayment Amount' is reached.

2. Daily Reconciliation Loop

The highest risk in MCA is a failed ACH pull that goes unnoticed.

• ACH Matching: NAYA reconciles the daily ACH debit against the expected collection amount.
• Exception Handling: If a pull fails (NSF), NAYA flags the account immediately, allowing your collections team to intervene before the debt goes bad.
• Partial Collections: If a merchant pays only part of the daily amount, NAYA allocates it according to your waterfall logic (e.g., fees first, then principal).

3. Factor Rate & Profitability Tracking

MCA providers earn revenue through the Factor Rate (e.g., advance $10k, collect $12k = 1.2 factor).

• Deferred Revenue: NAYA tracks the $2k "profit" as deferred revenue, recognizing it pro-rata as repayments come in.
• Portfolio Health: View the "Pacing" of every deal. Is the merchant repaying faster or slower than expected? NAYA calculates the effective APR in real-time based on actual repayment speed.

4. Syndication Management

Many MCA providers syndicate deals to other investors to spread risk.

• Investor Sub-Ledgers: NAYA creates a sub-ledger for every syndicate partner.
• Automated Splits: When $100 is collected from the merchant, NAYA automatically credits $50 to you and $50 to your partner (if 50/50 split), managing the "Waterfalls" of cash distribution.
• Investor Reporting: Generate transparency reports for your capital partners instantly.

How It Works

1. Origination: You book the deal in NAYA: Advance $50k, Purchased Amount $65k, Split 15%.
2. Daily Ingestion: Every night, NAYA ingests the merchant's sales total ($4,000) via API.
3. Calculation: NAYA calculates the due amount: $4,000 * 15% = $600.
4. Collection: You trigger the ACH debit for $600.
5. Reconciliation: When the $600 hits your bank, NAYA marks that day's repayment as "Settled" and reduces the outstanding balance to $64,400.

Technical Implementation

Here is an example of booking a daily repayment event. NAYA handles the split logic automatically.

const salesEvent = {
  merchant_id: "m_12345",
  date: "2026-01-08",
  gross_sales: 4000.00,
  source: "Stripe Connect"
};

// NAYA automatically:
// 1. Looks up contract (Split = 15%)
// 2. Calculates repayment ($600)
// 3. Books the ledger entry below

const ledgerEntry = {
  type: "mca_repayment_accrual",
  entries: [
    { account: "merchant_bank_proxy", dr: 600 },
    { account: "mca_receivable_principal", cr: 500 },
    { account: "mca_deferred_revenue", cr: 100 }
  ]
};

Compliance & Controls

NAYA's Controls framework helps you manage risk proactively.

• COJ (Confession of Judgment) Triggers: Set alerts if a merchant misses X consecutive payments or if revenue drops by Y%.
• Stacking Detection: Monitor bank feeds for unauthorized debits from other lenders (stacking), a major risk in MCA.

Scale your MCA business with confidence, knowing that your ledger reflects reality every single morning.