David Roitblat is the founder and CEO of Better Accounting Solutions, an accounting firm based in New York City, and a leading authority in specialized accounting for merchant cash advance companies.
To connect with David, email david@betteraccountingsolutions.com.
Articles by David Roitblat
Audit Season Is Coming: How to Get Your MCA Books Ready Before the Panic Starts
April 20, 2026David Roitblat is the founder and CEO of Better Accounting Solutions, an accounting firm based in New York City and a leading authority in specialized accounting for merchant cash advance companies. To connect with David or schedule a call about working with Better Accounting Solutions, email david@betteraccountingsolutions.com.
Audits do not create problems. They reveal them. This distinction matters more than most funders realize, because the panic that accompanies audit season rarely stems from the auditor’s requests. It stems from the gap between the order a company believes it has and the order it actually keeps.
A funder in Chicago learned this one March when his auditor sent a routine request: ten funded deals, their supporting documents, and the corresponding bank activity. He expected the ask. What he did not expect was how long it took his team to assemble everything. Three merchant applications were missing pages. One deal had two payoff letters saved under different names. A renewal had been recorded without a clear link to the original advance. Nothing was catastrophic, but everything took longer than it should have. He looked around the conference table and saw the same realization on everyone’s face. The audit had not made the mess. It had simply exposed it.
This is how most MCA shops encounter audit season. The good news is that readiness does not require special software or a large finance team. It requires discipline in daily habits long before the auditor appears.
Reconciliation of RTR balances is a natural starting point. Many funders assume their balances are accurate because the CRM shows a clean number. In practice, reconciliation depends on tight alignment between the CRM, processor reports, and the accounting ledger. If any of these sources lag by even a few days, mismatches will begin to form. A merchant’s payment might fail on Friday, get resubmitted Monday, and post to the ledger Tuesday. Without consistent reconciliation, the funder sees one story while the auditor sees another. A steady daily or weekly routine of matching processor deposits to merchant balances prevents these gaps from widening into explanations nobody wants to give.
Wire activity demands the same attention. Funding wires, collections wires, reserve transfers, syndicator payouts: each touches different parts of the books. A company that does not document these movements as they occur eventually faces a stack of transactions labeled simply “funding” or “payout,” requiring backward reconstruction that consumes hours. One funder discovered that three wires recorded as syndicator payouts were actually renewals paid in error from the wrong account. Small mistakes, but they created lengthy explanations. A simple internal rule that every wire must carry an attached note and supporting detail at the moment it is sent eliminates that uncertainty before it takes root.
Syndicator splits introduce their own complications. When multiple investors participate in a deal, the funder becomes responsible for tracking each share of principal and returns with precision. Problems arise when the initial split is entered inconsistently, or when renewals process without correctly updating the syndicator’s residual balance. During audits, these discrepancies stand out immediately. One company maintained a separate spreadsheet for syndicator participation because their CRM could not display multi-party splits cleanly. The spreadsheet worked until the team member who managed it went on leave. No one else understood the logic. The audit revealed not a major error, but a process built around one person instead of a system. Auditors look for evidence that the company can reproduce its numbers without depending on any single employee.
Default classification is another area where funders frequently fall behind. A delayed payment can linger in active status for weeks because no one wants to mark it as default prematurely. But when the auditor reviews the file, unclear classification becomes a problem. The funder must show when the merchant became delinquent, what outreach occurred, and how the remaining balance is being treated. A restaurant in Texas once stopped paying for three weeks. The collections notes lived in the account manager’s personal notebook instead of the CRM. The auditor flagged the discrepancy because the books still showed the merchant as active. Proper classification helps the funder understand portfolio behavior and demonstrates to the auditor a clear, consistent process.
Underlying all of this is documentation quality. Merchant applications should align with the funded terms. Bank statements should be complete. Contracts should be saved with names that make sense across the team, not names that make sense only to the person who downloaded them. Renewals should show the payoff, the redeployment of capital, and the new terms in one complete package. Missing pages, duplicated files, and vague naming conventions do not cause financial harm directly, but they slow the audit and weaken the impression of professionalism. A well-organized document library is one of the simplest ways to make an audit move smoothly.
Internal controls play a larger role than many funders expect. An auditor does not expect a small MCA company to maintain the same segregation of duties as a large financial institution, but they do expect clear responsibilities. If the same person initiates payments, reconciles bank accounts, and approves adjustments, the company has created unnecessary risk. Even a small team can separate duties by establishing checkpoints. One person prepares the payout. Another reviews it. A third reconciles the bank activity. These controls do not exist to catch wrongdoing. They exist to make wrongdoing difficult in the first place.
The habits that lead to a smooth audit cannot be assembled the month before it begins. They must be woven into ordinary operations throughout the year. A weekly ten-minute review of aging reports reveals shifts early. A monthly check of syndicator exposure confirms whether splits were entered correctly. A simple rule that every merchant contact must be logged before the end of the day prevents confusion when questions arise later. At Better Accounting Solutions, we encourage clients to think of these routines not as audit preparation but as as the proper way to run a business. The audit simply confirms what healthy habits have already produced.
Audit readiness benefits the team in ways that extend beyond the audit itself. When systems are disorganized, staff spend more time defending their work than improving it. When information scatters across folders and inboxes, no one feels fully in control. A clean, disciplined financial environment reduces stress for everyone. New employees learn what good work looks like because the system teaches them. Managers spend less time searching for answers and more time interpreting what the answers mean.
Audits also shape how capital partners view the company. Syndicators and institutional investors frequently request audit reports before deepening their commitments. A clean audit signals stability and transparency. A messy one does not automatically disqualify a funder, but it raises questions that take time and credibility to resolve. A funder who treats the audit as part of their annual rhythm presents a stronger case to partners than one who treats it as an interruption to be survived.
Many funders approach audits with dread. The dread usually fades once the process begins, because audits do not invent problems. They surface them. And once surfaced, problems can be fixed. Funders who treat findings as guidance rather than criticism tend to grow faster. They catch issues earlier. They build stronger infrastructure. They develop habits that improve performance year-round rather than only during preparation season.
In an industry where capital moves quickly and margins shift without warning, reliability becomes a competitive strength. A company with clean books makes better decisions. It moves faster because it spends less time reconciling its own history. It communicates more clearly with partners because its numbers are organized and honest. Audit readiness has less to do with pleasing an auditor and more to do with strengthening the structure that supports every advance.
The calmest funders during audit season are not the ones with perfect portfolios. They are the ones who built habits long before the auditor arrived. They did the small things consistently. They documented what they did. They noticed discrepancies and addressed them. Audit season becomes a checkpoint instead of a crisis. And the company emerges stronger each year because clarity became part of how it operates.
Beyond Funding: Building Long-Term Merchant Relationships That Drive Repeat Business
March 26, 2026David Roitblat is the founder and CEO of Better Accounting Solutions, an accounting firm based in New York City and a leading authority in specialized accounting for merchant cash advance companies. To connect with David or schedule a call about working with Better Accounting Solutions, email david@betteraccountingsolutions.com.
Most MCA companies pour extraordinary energy into acquisition. They chase new files, negotiate with brokers, refine their pitch, and work hard to stand out in a crowded market. This makes sense. Without new deals, there is no business. But acquisition alone does not create stability. Stability comes from the merchants who return.
Renewals are not a softer version of new deals. They are the backbone of sustainable growth. The economics are straightforward: a renewing merchant costs less to acquire, repays more predictably, and requires less hand-holding than a first-time borrower. Yet many funders treat renewals as a pleasant surprise rather than a strategic priority. The companies that mature gracefully understand something different. They understand that long-term merchant relationships are assets, not accidents.
A broker at a mid-sized firm once told me about a call she took late one afternoon from a restaurant owner she had funded six months earlier. He was behind on a project and wanted to talk through his repayment schedule. The conversation lasted fifteen minutes. Nothing dramatic happened. No restructuring, no dispute, no crisis. But when he hung up, he said something she remembered for years: “You’re the only funder who talks to me like a person, not a ticket.” Three months later, he renewed. Not because the rates were the lowest, but because the relationship felt steady, human, and fair.
This is how loyalty forms in the MCA world. Not through marketing, but through moments.
Building those moments with how you communicate. Merchants lead busy, unpredictable lives. Their days rarely follow clean patterns. When they their funder, they need clarity, not scripted reassurance. They want someone who understands where their business A roofing contractor in Arizona faces different pressures than a retail shop in Manhattan. Cash flow rhythms differ. Margins differ. Risks differ. When a funder can speak to those specifics, trust begins to form. Trust does not come from charm. It comes from being understood.
Persistence builds the next layer. Funders sometimes underestimate how closely merchants observe reliability. A merchant might not mention it when a broker forgets a promised check-in, but the impression settles quietly. When a question gets answered with care, when a collector calls in a calm manner instead of an urgent tone, the merchant notices. Consistency becomes a form of respect. It signals that the merchant is more than an entry in the CRM.
Education plays a powerful and often overlooked role. Many merchants enter the MCA world with only a rough grasp of how repayment actually works. They know they will pay daily or weekly, but they do not always understand how those payments interact with their sales cycles or cash reserves. A funder who takes five minutes to explain what to expect earns something valuable. An informed merchant is calmer, less reactive, more likely to communicate early when something shifts. Education lowers tension. It also increases their renewal probability because the merchant feels guided rather than pushed.
Even collections shapes renewal behavior. A merchant who experiences difficulty does not forget how they were treated. Shops that approach collections as a relationship function rather than a mechanical chase recover more money and preserve more trust. When a collector says, “Walk me through your last two weeks so we can figure this out,” the merchant feels supported. When a collector launches straight into pressure, the merchant feels cornered. That memory lingers long after the balance is repaid. It becomes the lens through which the merchant decides whether they want to work with that funder again.
A deli owner in Queens once struggled for three weeks after construction on his block slowed foot traffic. He had not missed payments before, and he answered every call. The funder listened, reviewed the account, and offered a temporary reduction without making the merchant beg for it. The merchant finished the term and renewed later that year. More importantly, he began referring other business owners because, in his words, “These people did right by me.” The return on that fifteen-minute conversation extended far beyond the single file.
Companies often assume merchants renew simply because they need more capital. Many do. But need alone does not create loyalty. Merchants choose to return when they feel the funder stood with them rather than over them. That feeling emerges from a series of small interactions. The call returned promptly. The question answered clearly. The email written without jargon. These small acts compound. They create goodwill that can survive a rough patch.
Speed shapes perception too, though not in the superficial way many firms advertise. Merchants do not need an in an hour. They need predictability. They need to know the process will move when the funder says it will. Funders who set clear expectations, and honor them consistently, outperform those who boast about speed they achieve only some of the time. Reliability feels like partnership. Unpredictable speed feels like improvisation.
Renewal strategy must also respect the merchant’s timing. Some merchants benefit from renewing early. Others resent being pushed into another deal before completing the current one. A funder who recognizes these differences turning renewal into pressure. When a merchant feels free to say “not yet” without disappointing the funder, they often return willingly when the time is right. Respect builds revenue. Pressure builds churn.
Recordkeeping supports all of this. When notes are entered clearly and consistently, any team member can pick up a merchant conversation without forcing the merchant to repeat their story. Imagine how a merchant feels when they call and the person on the line already understands last month’s issue, last week’s deposit pattern, the context around a late payment. That experience feels personal. It also builds confidence in the funder’s competence. At Better Accounting Solutions, we often see that companies with strong financial documentation habits also tend to have stronger merchant relationships. The same discipline that produces clean books produces clean communication.
As a company grows, these relationship practices need structure behind them. You cannot rely on individual employees to carry the ethos alone. Systems must support it. That means standardized follow-up schedules, consistent outreach slow periods, customer notes written in a shared language. It means training that emphasizes respect, clarity, and professionalism. It means leadership reinforcing that renewals are earned through service, not through pursuit.
The payoff is significant. Renewal merchants have lower acquisition costs and steadier repayment patterns. They ask fewer basic questions, because they trust the funder. They create fewer surprises, because they communicate earlier. They become the foundation on which the company can build more ambitious strategies. New business drives excitement. Renewals drive efficiency. The most profitable MCA companies treat renewals not as bonus volume, but as central to the business model.
Merchants talk to each other more than funders realize. A good experience travels through neighborhoods, industries, and online forums quickly. A bad experience travels faster. A funder who handles renewals with thoughtfulness and consistency often finds themselves receiving inbound interest from merchants they never contacted. The relationship becomes its own marketing channel.
Strong merchant relationships do not require grand gestures. They require steady, thoughtful attention. They require a funder who sees beyond the advance and into the life of the business receiving it. They require patience with timing and firmness with expectations. They require a team that communicates clearly and listens carefully. When these elements come together, renewals stop feeling like sales. They feel like the natural continuation of a working partnership.
An MCA shop that masters this, discovers that long-term relationships are not sentimental goals. They are strategic ones. They stabilize the portfolio. They reduce volatility. They lower costs. They widen the circle of opportunity. And they transform a funding business from constantly chasing the next deal into something that grows from deepening roots.
The Most Common Mistakes MCA Companies Make Early On, and How to Avoid Them
February 27, 2026David Roitblat is the founder and CEO of Better Accounting Solutions, an accounting firm based in New York City and a leading authority in specialized accounting for merchant cash advance companies. To connect with David or schedule a call about working with Better Accounting Solutions, email david@betteraccountingsolutions.com.
Most MCA companies that fail do not do so dramatically. They erode. The founder looks back after eighteen months and wonders how a business with so much early momentum ended up struggling for liquidity and chasing syndicator trust it somehow lost. Half its energy goes toward untangling records that should have been clean from the start. The answer is almost never a single catastrophic decision. It is a sequence of small ones, each reasonable in isolation, that compound into structural weakness.
I think of a young funder in New Jersey who reviewed his first ten funded deals about three months in. Several merchants were falling behind at nearly the same point in their terms. His underwriting notes, scattered between email threads and a spreadsheet he kept meaning to organize, offered no explanation. Nothing was broken exactly. But nothing lined up either. He had volume. He had brokers sending files daily. He had energy. What he did not have was a process that could teach him anything. The warning signs were already there, small and easy to dismiss, expensive to ignore.
This is how early lessons arrive. Not as crises, but as patterns that take shape slowly and reveal themselves only in hindsight.
The most common early mistake is stretching advances to win deals. A new funder feels pressure to grow, to prove they belong in the market. A merchant asks for more than the bank statements justify. A broker insists the file is clean, that steady work is lined up for next month, that the deal will perform. The funder approves the higher amount, reasoning that a larger fee compensates for the added risk. Weeks later, repayment starts slipping. By the time the weakness becomes undeniable, the funder realizes the pricing never reflected reality. This does not happen once. It happens across a dozen files, each approved with the same hopeful logic. Stretching becomes a quiet bleed on cash flow that can destabilize a young portfolio before anyone fully understands what went wrong.
Reserves present a related trap. Many funders hear performance benchmarks from brokers or peers and assume their own book will behave similarly. They reserve lightly because they want capital moving, or because early merchants seem stable. Then the first real default arrives, followed quickly by two more. The funder scrambles to cover obligations from operating cash, and suddenly the business has no cushion. Adequate reserves are not pessimism. They are acknowledgment that early portfolios behave unpredictably. A new company must protect itself long enough to learn the patterns unique to its own underwriting. That learning takes time, and time requires liquidity.
Syndicator relationships suffer their own form of neglect. Many companies treat outside capital as fuel, assuming the relationship will sustain itself as long as returns look acceptable. Reporting gets delayed because the funder is busy elsewhere. A few numbers fail to reconcile, and the explanation comes later, once there is time. A question sits unanswered for days because the team is stretched thin. None of this feels catastrophic in the moment. But syndicators notice. They remember which funders communicate clearly and which require chasing. A company that cannot deliver timely, organized information will struggle to attract the deeper commitments that make real scaling possible. Trust, once damaged, rebuilds slowly.
Recordkeeping is another early fragility, and perhaps the most underestimated. Companies store documents wherever convenient. Underwriting notes live partly in one CRM field, partly in a manager’s notebook, partly in an email thread nobody can find. Bank statements get downloaded twice under slightly different names. Merchant calls get logged sporadically or not at all. This scatter creates a version of the portfolio that cannot be reconstructed when questions arise. When a renewal decision needs context, or a payment dispute requires history, the funder spends more time searching than thinking. The real cost is not inconvenience. It is the loss of insight. Without organized records, the business cannot learn from its own decisions. It repeats mistakes because it cannot see them.
A subtler confusion appears around accounting itself. Early funders often rely on a basic bookkeeping setup that captures revenue and expenses for tax purposes but reveals nothing about deal-level behavior. They know how much was deposited in their account last month but they don’t know how much they have actually earned. They do not know how much came from renewals versus new advances. They cannot see aging by cohort or measure actual recovery on RTR. This blindness forces leadership to operate on instinct precisely when the business needs measurement. Tax accounting satisfies the IRS. Performance accounting informs the funder. They are not the same thing, and treating them as interchangeable is a mistake that catches up with everyone eventually. At Better Accounting Solutions, we see this confusion regularly across companies at all stages, and it is one of the most correctable problems a company can have once they recognize the distinction.
Manual processes create their own problems. A new funder typically handles underwriting, approvals, and collections all on their own. While volume remains small, this works well enough. When growth accelerates, the lack of automation creates bottlenecks nobody anticipated. Payments get entered inconsistently. Renewal dates slip. Collections follow-up happens later than it should because attention is elsewhere. Automation is not about removing human judgment. It is about preventing predictable errors and preserving time for decisions that actually require thought. A company that waits too long to automate finds itself perpetually behind its own workload, reacting instead of directing.
Internal communication frays in predictable ways. In the early months, everyone assumes mutual understanding. An underwriter mentions a concern casually, expecting the broker to remember. A collector flags a struggling merchant without copying the person handling renewals. Leadership assumes processes are clear because the team is small and motivated. As volume increases, these assumptions collapse. Files pass between hands without context. Merchants receive contradictory messages. Renewals go out to customers whose repayment problems were never properly documented. Misalignment produces errors that compound quietly until they become visible as losses.
There is also a tendency for growing companies to chase volume without asking whether the volume fits their identity. A broker steers them toward certain merchant types because those deals are easier to place. The funder accepts, thinking refinement can come later. Soon the portfolio fills with merchants whose cash flow patterns the funder never intended to specialize in and does not fully understand. Course correction grows difficult. A successful MCA company chooses its portfolio deliberately. Companies that let the market dictate their mix often end up managing risks they never planned to carry.
Avoiding these mistakes does not require slowing down. It requires shifting from improvisation to intention. The early months of an MCA company can be both energetic and disciplined. Strong companies grow quickly while pricing risk honestly, rather than optimistically. They communicate with syndicators as though every interaction affects future capacity, because it does. They build recordkeeping habits that allow decisions to be understood weeks or months later. They create performance reports that reveal the truth of the business even when the truth is uncomfortable. They automate early so people can think instead of chase.
A company that adopts this mindset gains more than stability. It gains clarity. It learns quickly which brokers bring consistent files and which bring chaos. It sees which underwriting patterns produce reliable merchants and which produce headaches. It discovers which segments renew and which vanish after one cycle. That clarity becomes confidence. Instead of guessing what next month holds, leadership understands why the portfolio behaves the way it does.
The early years set the character of the business. They determine whether growth happens under control or in crisis. Companies that take early structure seriously build foundations that can support scale. They do not fear velocity because they understand it. They do not scramble for liquidity because reserves were planned properly. They do not lose partners because communication stayed steady. And they do not spend their future cleaning up their past.
No MCA company avoids every mistake. The goal is avoiding the predictable ones. The first years offer a choice: chase speed and let structure catch up later, or build habits that make growth sustainable from the start. Companies that choose structure rarely regret it. They discover, often sooner than expected, that clarity is the real competitive advantage.
The Moment Growth Becomes Risk: Scaling Your MCA Operations Without Losing Control
December 1, 2025David Roitblat is the founder and CEO of Better Accounting Solutions, an accounting firm based in New York City, and a leading authority in specialized accounting for merchant cash advance companies.To connect with David or schedule a call about working with Better Accounting Solutions, email david@betteraccountingsolutions.com.
There is a peculiar irony at the heart of every successful merchant cash advance company: the very growth its founders dream of is often what nearly destroys it. This paradox plays out with remarkable consistency. A small team, two or three people working from a modest office, builds something that works. The CRM handles the volume. Spreadsheets track deals and daily payments well enough. Then volume triples, deals close faster, syndicators come calling, and what once felt like a well-oiled machine starts grinding against itself. Reconciliations that took an afternoon now consume days. Syndicator payouts lag behind collections. Team members duplicate each other’s work or, worse, leave critical tasks undone because everyone assumed someone else was handling them. The founders, who used to spend their days funding new deals and building relationships, now spend them firefighting.
This is not failure. It is something more interesting: the natural consequence of success meeting its own limitations. What serves a $5 million portfolio beautifully will buckle under a $50 million one. The difference between companies that plateau and companies that break through to the next level is rarely about talent or ambition. It is almost always about infrastructure.
Consider what actually breaks when MCA companies scale. Most do not collapse because they funded bad deals. They stumble because their internal systems, designed for a simpler era, cannot support a more complex present. The cracks appear in predictable places. Financial reporting is usually the first casualty. Early-stage funders get by on Google Sheets, basic bookkeeping, manual reconciliations. These tools are not wrong; they are merely insufficient at scale. When the number of merchants, syndicators, and advances multiplies, a single missed entry can cascade into inaccurate financial statements, strained relationships with syndicators, and the slow erosion of investor trust. Process control is the second vulnerability. Tasks that were once intuitive, handled by whoever happened to be nearby, now require explicit ownership and documentation. Without clear internal controls (who approves, who reconciles, who verifies), errors slip through unnoticed. Sometimes fraud does too. The third weakness is visibility itself. You cannot manage what you cannot see. When daily cash flow, default rates, and syndicator balances require hours of digging to surface, decisions get made in the dark. And decisions made in the dark have a way of looking foolish in the light.
At Better Accounting Solutions, we encounter these challenges constantly in companies that are, by most measures, thriving. Talented people, profitable operations, genuine momentum. Their systems simply have not kept pace with their ambition. The encouraging news is that this moment of strain, properly recognized, can become a turning point rather than a dead end.
The solution is not to work harder at what you have been doing. It is to change how you operate. Standardization, for instance, sounds dull until you realize it is the foundation of everything else. In the early days, flexibility is a genuine advantage. As you scale, consistency becomes more valuable. Standardize your chart of accounts, your naming conventions, your reconciliation methods, your reporting cadence. Everyone working from the same playbook beats everyone improvising their own. Separating duties matters more than most founders initially appreciate. No single person should control every part of a transaction. One staff member initiates payments; another reconciles them. One prepares financial statements; another reviews and approves. These boundaries are not bureaucracy for its own sake. They prevent honest mistakes and protect against dishonest ones. Automation, done intelligently, amplifies what your people can do. Integrated systems connecting your CRM, accounting software, and ACH processors mean that daily payments, collections, and RTR updates align automatically. Manual uploads disappear. Your staff can spend time on analysis instead of data entry. And perhaps most importantly, you must learn to forecast cash flow rather than simply record it. Fast-growing MCA operations fall into reactive mode with alarming ease, forever chasing yesterday’s numbers. True scaling requires financial models that look forward, anticipating capital needs weeks or months ahead. That visibility keeps you agile. It keeps you investor-ready.
When volume surges, clarity becomes everything. Strong internal reporting is not just about compliance, though compliance matters. It is about how you steer the ship. An MCA operation’s financial heartbeat depends on knowing, at any moment, where money is flowing, what capital remains deployed, how repayment behavior is shifting. The faster you spot trends forming, the faster you can respond: adjusting advance sizes, tightening collections policies, rebalancing syndication exposure before small problems become large ones. Firms that lack this visibility find themselves perpetually reacting. They learn about performance only in hindsight, after shortfalls or liquidity squeezes have already hit. The companies that scale effectively build systems where accuracy and timeliness become reflexive, not heroic.
There is another dimension to all this that founders sometimes underestimate: credibility. As portfolios expand, scrutiny from investors, auditors, and potential acquirers intensifies. Documentation that once seemed optional (signed syndicator agreements, precise RTR recognition, clear merchant performance records) becomes the foundation of trust. If you ever want to attract institutional funding, that trust must be demonstrable on paper. Clean, GAAP-compliant books do not just protect you from trouble. They make you more valuable. Audits go faster. Valuations strengthen. Investor onboarding smooths out. Many firms discover that once their accounting achieves proper structure, opportunities begin materializing that were previously out of reach: new lines of credit, stronger partnerships, greater confidence from the very funders who once kept them at arm’s length.
There comes a moment in every MCA company’s evolution when hustle alone stops being enough. Processes must replace instincts. Systems must replace improvisation. This is not a loss of the entrepreneurial spirit that built the company. It is the necessary evolution from founder-driven to professionally managed. Think of it this way: scaling is not about building a bigger engine. It is about tuning the engine so it can run at higher speeds without burning out.
Growth should be exciting, not exhausting. When your systems are sound, your reports reliable, your finances transparent, growth need not mean chaos. It can mean confidence. The difference between an MCA company that peaks early and one that scales sustainably often comes down to a single question: readiness. Are your systems built for the volume you are chasing? Are your reports investor-ready? Can your team process ten times more transactions without losing accuracy or visibility? If the honest answer is “not yet,” then now is the time to prepare. The stronger your financial foundation, the smoother your next phase of growth will be. Success, after all, is not just about closing more deals. It is about building an operation strong enough to handle them all.
The Battle Against MCA in Texas
June 12, 2025David Roitblat is the founder and CEO of Better Accounting Solutions, an accounting firm based in New York City, and a leading authority in specialized accounting for merchant cash advance companies.To connect with David or schedule a call about working with Better Accounting Solutions, email david@betteraccountingsolutions.com.
Texas, a state associated with limited government intervention and freedom of business to operate and succeed in a capitalist society, stands at a crossroads.
Governor Greg Abbott has until June 22nd to decide whether to sign House Bill 700 into law—a decision that could fundamentally reshape how small businesses access capital in the Lone Star State. If he signs it, or simply lets the deadline pass without action, this sweeping legislation will take effect on September 1, 2025. The action will potentially cut off vital funding sources for thousands of Texas entrepreneurs, in a direct assault on the merchant cash advance industry that has been a lifeline for the people of his state.
The stakes couldn’t be higher. While supporters frame HB 700 as consumer protection, this bill targets sales-based financing—financial tools that have become lifelines for small businesses shut out of traditional bank lending.
Small business owners know the frustration of walking into a bank and walking out empty-handed all too well. Traditional lenders have tightened their belts, especially for newer businesses, minority-owned enterprises, and companies in industries deemed “risky.” When a restaurant owner needs quick capital to fix a broken freezer, or a contractor requires funds to purchase materials for a big job, they can’t wait weeks for a bank’s approval process. They need solutions now.
That’s where alternatives come in. Revenue-based financing provides capital based on future sales, not credit scores or lengthy financial histories. Yes, they can be more expensive than bank loans—but they’re also available when banks say no.
This financing drives business growth, job creation, and the health of Main Street. When small businesses can access capital quickly, they expand, hire employees, and strengthen their communities.
HB 700 goes far beyond simple disclosure requirements. While transparency is important—and most responsible providers already provide clear terms—this bill creates a regulatory maze that could price many providers out of the Texas market entirely.
The bill imposes sweeping new requirements that will fundamentally change how sales-based financing companies operate in Texas. Companies providing commercial sales-based financing must register with the Office of Consumer Credit Commissioner by December 31, 2026, including both direct providers and brokers, with mandatory annual renewals and fees.
For any financing under $1 million, sales-based financing providers must provide extensive disclosures covering everything from total financing amounts and disbursement details to payment schedules, additional fees, prepayment penalties, and even broker compensation arrangements. The operational restrictions go much deeper, voiding confession of judgment clauses entirely and requiring companies to obtain recipient signatures on all disclosures before finalizing any transaction.
Perhaps most problematic is the prohibition on automatic debiting of recipient accounts unless companies hold a “validly perfected first-priority security interest”—a legal standard that’s nearly impossible to meet in practice and effectively kills the streamlined payment processes that make revenue-based financing work for the funders, and by extension, the merchants.
The Finance Commission of Texas gains broad authority to identify and prohibit “unfair, deceptive, or abusive” practices, though interestingly, they cannot set maximum interest rates or fees. Violations carry steep civil penalties of $10,000 each, and the law applies to any provider offering services to Texas recipients via the Internet, regardless of where the company is physically located. These aren’t minor regulatory adjustments—they represent a complete overhaul that could drive legitimate capital providers out of the Texas market entirely.
This isn’t just bureaucratic red tape. It’s a fundamental misunderstanding of how modern business financing works. Revenue-based financing depends on streamlined payment processes tied to daily sales. Without this mechanism, the entire business model becomes unworkable.
If HB 700 becomes law, the consequences will ripple through Texas’s economy. Small businesses already struggling with inflation, labor shortages, and supply chain disruptions will lose access to flexible financing options. Rural businesses, minority-owned enterprises, and startups will be hit hardest—exactly the businesses Texas should be supporting.
The irony is stark. Texas has built its reputation as a business-friendly state, attracting companies fleeing overregulation in other states. HB 700 threatens to undermine that competitive advantage by making it harder for small businesses to access the capital they need to grow.
The voices of actual small business owners have been largely absent from this debate. Many don’t even know this legislation exists, despite its potential impact on their operations. Those who are aware express frustration that lawmakers are making decisions about their financing options without understanding their real-world needs.
Governor Abbott faces a clear choice. He can sign legislation that will likely drive responsible funders out of Texas, or he can recognize that small businesses need access to diverse financing options.
The goal should be protecting businesses from truly predatory practices while preserving their ability to access capital when traditional banks won’t help. That requires nuanced policy, not broad restrictions that treat all alternative finance providers as predators.
The battle against MCA regulation in Texas isn’t really about merchant cash advances—it’s about whether Texas will remain a place where small businesses can find the capital they need to thrive. Governor Abbott’s decision will determine not just the fate of HB 700, but the future of small business financing in Texas.
The countdown has begun. Texas small businesses are watching and waiting.
Turning Connections into Opportunities After Broker Fair 2025
May 27, 2025David Roitblat is the founder and CEO of Better Accounting Solutions, an accounting firm based in New York City, and a leading authority in specialized accounting for merchant cash advance companies.To connect with David or schedule a call about working with Better Accounting Solutions, email david@betteraccountingsolutions.com.
“You never know who you’re going to meet.”
That’s the reason I continue to go to Broker Fair.
Once again, the merchant cash advance community showed up in full force this past Sunday and Monday. This year’s Broker Fair felt particularly energized. The sessions were packed, the conversations were substantive, and the networking opportunities were abundant.
As I watched hundreds of industry professionals network across the venue, I couldn’t help but reflect on my journey from skeptic to evangelist when it comes to these industry gatherings. As the founder of Better Accounting Solutions, I’ve now attended Broker Fair for years, and each time I walk away with renewed conviction that these events are not just beneficial—they’re essential for anyone serious about growing in this industry.
The real value of Broker Fair doesn’t end when the last panel concludes or when you check out of your hotel. In fact, the days and weeks following the event might be the most critical period for turning those brief conversations into meaningful business relationships.
Many of us left Tribeca 360 with pockets full of business cards and phones loaded with new contacts. Now comes the crucial part: following up. I’ve learned through experience that a simple “Great meeting you” email within 48 hours makes all the difference between a forgotten handshake and a productive business connection.
At this year’s event, I reconnected with clients who have become friends, met potential new partners, and had enlightening conversations with industry figures I’ve long admired.
One particular conversation with a broker could potentially open doors to a new service offering at Better Accounting Solutions. Another led to me introducing a potential syndicator to a funder, while other meetings inspired me to explore different angles to the business I hadn’t thought of before. These opportunities wouldn’t have materialized if I’d stayed back at the office, convinced that keeping my head down was more productive than engaging with the community.
Following Up Effectively
Having attended many of these events over the years, I’ve developed a system for effective follow-up:
- Act quickly: Send personalized follow-up emails within 48 hours while the conversation is still fresh.
- Be specific: Reference something unique about your conversation to jog their memory.
- Provide value first: Share an article, resource, or introduction that might help them before asking for anything in return.
- Suggest a concrete next step: Whether it’s a virtual coffee, lunch meeting, or specific business proposal, don’t leave the relationship hanging.
- Connect online: Add your new contacts on LinkedIn with a personalized connection request.
By doing this, Better Accounting Solutions has secured multiple major clients directly from connections made at Broker Fair over the years. The ROI isn’t always immediate, but the long-term value of being present, being known, and being engaged in the community is immeasurable.
“NETWORKING IS REAL WORK…”
This bears repeating. The conversations you have, the relationships you build, and the insights you gain at events like Broker Fair are as much a part of building your business as the hours you spend at your desk.
For those who missed this year’s event, I strongly encourage marking your calendars for next year. And for those who attended but haven’t yet followed up on those promising conversations—what are you waiting for? The window of opportunity is open right now.
Better Accounting Solutions was proud to partner with Broker Fair once again this year, not just as a business strategy but as a testament to our belief in the power of community in this industry. The connections made and strengthened at these events have been instrumental in our growth as leaders in specialized accounting for the merchant cash advance industry.
How to Prepare for Outside Syndicators
April 29, 2025David Roitblat is the founder and CEO of Better Accounting Solutions, an accounting firm based in New York City, and a leading authority in specialized accounting for merchant cash advance companies.
To connect with David, email david@betteraccountingsolutions.com.
There’s a clear gap of knowledge in our industry, and how merchant cash advance businesses need to prepare themselves to receive outside money in investment or syndication.
Whether you’re seeking your first institutional investment or scaling to eight-figure funding rounds, the preparation required isn’t just about having good portfolio performance—it’s about having the financial infrastructure responsible investors need to see before forking over money to you. Not knowing how to prepare that for them can cost you months of delays or even kill promising funding opportunities entirely.
I’ve seen too many MCA shops operating under a misconception. They believe that the impressive Google Sheets presentation showing their advance volume, daily collection rates, and merchant performance will be sufficient when courting serious investors.
Sometimes that’s enough. When you’re looking to raise money from friends and family, you have flexibility. These investors typically accept basic performance reports showing advance volume and collection rates, might not request detailed merchant-level financials, and generally won’t demand formal audits. Basic spreadsheets might suffice at this stage when you’re raising up to about $1 million in capital to fund your advances.
The financial documentation requirements escalate dramatically when you need more than that.
Once you move beyond self-funding or friends and family money into the realm of raising $5-10 million or more, investors won’t accept your homegrown reporting systems or month-end bundle accounting—they want audited financials and proper transaction-level documentation.
Sophisticated syndicators expect a professional CRM system tracking all merchant relationships, detailed default modeling, GAAP-compliant accounting systems that properly account for income recognition on merchant advances, and as investment amounts increase, audited financials become non-negotiable.
Auditors don’t accept shortcuts in the MCA space. They require transaction-level detail with recognized income on each advance, estimated defaults by cohort, and precise documentation of collection performance. They’re specifically looking for attempts to bundle or obscure individual merchant performance – a common practice in some MCA shops that raises immediate concerns with institutional investors.
Here’s what most MCA operators don’t realize: Getting your books audit-ready isn’t a quick fix. It’s a process that can take several months to update historical advance and collection records, 3-4 months for a first-time audit (always longer than subsequent audits), and additional time for any remediation of collection documentation. In total, you’re looking at potentially 9-12 months from financial disarray to audited statements. That’s an eternity in the fast-moving MCA world when a funding opportunity appears.
If you even think you might seek significant outside capital within the next year, start preparing now. Implement proper merchant tracking systems immediately. Ensure all bookkeeping follows GAAP principles for advance recognition. Consider getting audited financials before you need them.
Yes, this requires upfront investment, but put it in perspective: If you’re raising $5 million to fund your advance portfolio (often just the starting point), the cost of proper financial infrastructure is minimal compared to the capital you’ll secure and the acceleration in your timeline.
The most successful capital raises in the MCA industry aren’t just about having a great portfolio performance – they’re about being ready when opportunity knocks. Don’t be the MCA provider explaining to eager investors why they need to wait a year while you get your advance and collection records in order. The most valuable asset in fundraising isn’t just your merchant performance – it’s being prepared to prove it immediately.
Why MCA Companies Need Syndicators
March 21, 2025David Roitblat is the founder and CEO of Better Accounting Solutions, an accounting firm based in New York City, and a leading authority in specialized accounting for merchant cash advance companies. To connect with David or schedule a call about working with Better Accounting Solutions, email david@betteraccountingsolutions.com.
The merchant cash advance (MCA) business is all about balance—managing risk while keeping capital flowing.
Many funders hesitate to bring in outside capital, especially if they already have a line of credit. The thinking goes: “If I have my own money, why should I split the profits?” But that perspective overlooks the key benefits syndication brings—not just in terms of capital but also risk mitigation and overall profitability.
The biggest advantage of working with syndicators is the ability to do more deals while spreading out risk. The more deals you fund, the more you diversify, which naturally increases your stability. If you’re advancing your own money, you’re taking on 100% of the risk. But with syndicators, that exposure is shared. Even if you already have a line of credit, using syndication means you’re not tying up all your liquidity in a few high-risk advances. Instead, you’re spreading your capital across more opportunities, reducing the chances of any single deal tanking your portfolio.
Syndication also creates a financial buffer through fees that MCA companies collect upfront. Syndicators don’t just bring in money; they pay to participate in your deals. Typically, they compensate the funder in one of four ways: paying an upfront fee (usually 3-5% of the RTR or 5-7% of the principal), paying part of the fee upfront and the rest as the deal is repaid, covering a portion of the origination fee, or splitting the profits at the end of the deal. These fees give MCA companies immediate cash flow, which helps offset risk before repayment even begins.
Consider this: if you fund a $100,000 deal and syndicators take on 50% of it while paying a 4% fee, you’ve immediately reduced your exposure. You’re technically in for only 48% of the deal, not 50%, because that fee cushions your position. On a larger scale, this compounds into significant risk reduction. If your default rate is 15% and syndication lowers your risk by just 5%, that’s a major improvement. A 10% default rate instead of 15% can be the difference between profitability and loss.
Origination fees further sweeten the deal. Some MCA companies split origination fees with syndicators, while others keep the entire portion from the syndicator’s investment. For example, in a $200,000 advance where the syndicator puts in $100,000, a 10% origination fee would total $20,000. If the funder keeps the entire 10% from the syndicator’s portion, that’s $10,000 of instant income—reducing risk right away. This means that even before payments start coming in, the MCA company is in a stronger position.
Profit-sharing models also offer advantages, particularly for MCA companies that want to keep more control over the deal structure. In these setups, syndicators don’t pay an upfront fee but instead share in the profits at the end. This allows funders to leverage external capital while still maintaining higher margins on successful advances. Some models even combine a profit split with an upfront syndication fee, offering the best of both worlds—immediate cash flow and long-term upside.
The bottom line is simple: syndication makes MCA portfolios stronger. It adds a layer of protection, reduces risk, increases deal volume, and injects capital upfront. A stronger, more diversified portfolio leads to more stability and, ultimately, higher long-term earnings.
For any MCA company serious about growth and sustainability, working with syndicators isn’t just an option—it’s a necessity. Overlooking these benefits in the name of not wanting to share profits shows a short-term mindset that may cost more in the future.
