A remittance is a payment sent from one party to another to settle an amount that is owed. The word simply means money that is transmitted, whether it moves by ACH transfer, wire, check, or card. In everyday commerce a remittance can be a customer paying an invoice, a company sending funds to a supplier, or a worker sending money to family in another country.
In business financing the term shows up in a narrower way. When a company takes on certain kinds of funding, such as a merchant cash advance, the regular payment it sends back to the funder is often called the "remittance." You may see phrases like "daily remittance" or "weekly remittance amount" in a contract. It is the scheduled sum pulled from your account until the agreed balance is paid down.
Key takeaways
- A remittance is money sent from one party to another to settle an amount owed.
- In business financing, it often refers to the scheduled daily or weekly payment made to a funder.
- Most business remittances move by ACH, pulled automatically from the company's bank account.
- The remittance amount and frequency are set in the funding agreement and should match your bank statement.
- MCA relief lowers the daily or weekly remittance to ease cash flow but does not erase the balance owed.
How a remittance works
A remittance is a transfer of value from a payer to a payee. Three things define it: who sends it, who receives it, and how much moves. In a financing context, the sender is the business, the receiver is the funder, and the amount follows a schedule set in the agreement.
Most business remittances today are handled by ACH, meaning the funder is authorized to withdraw the agreed amount directly from the company's bank account on a set rhythm. That rhythm is commonly daily (each business day) or weekly. The payments continue until the total obligation is satisfied. Because the schedule is automatic, the term "remittance" often refers to both the individual payment and the overall payment plan.
A quick example with round numbers
Suppose a business receives $50,000 in funding and agrees to pay back $65,000 in total. The agreement sets a fixed daily remittance over roughly 100 business days.
| Item | Amount |
|---|---|
| Funds received | $50,000 |
| Total to repay | $65,000 |
| Daily remittance | $650 |
| Business days to complete | ~100 |
Each business day, $650 is pulled from the company's account. That $650 is the remittance. After about 100 payments the $65,000 balance is cleared and the withdrawals stop. The numbers here are illustrative and rounded to keep the math simple.
Why it matters to a business owner
The remittance is the part of a financing agreement you feel most directly, because it leaves your account on a regular schedule. Knowing the exact amount and frequency helps you plan cash flow and confirm that the withdrawals match what you signed for.
It also matters when a payment feels too tight. If a daily or weekly remittance is straining the business, some owners look at MCA relief, which works by lowering the daily or weekly payment amount to ease pressure on cash flow. Relief changes the size or timing of the remittance; it does not erase what is owed. Reading your agreement so you know your remittance amount, frequency, and remaining balance puts you in a stronger position for any conversation about adjusting it.
Related terms
A few terms often appear alongside "remittance" and are worth knowing:
- ACH: the electronic network used to move most business remittances between bank accounts.
- Holdback: a percentage of daily card sales withheld as the remittance in some advance structures.
- Factor rate: the multiplier that sets the total repayment amount, which in turn shapes the remittance.
- Payoff balance: the amount still owed after the remittances made to date.
Frequently asked questions
Is a remittance the same as a repayment?
In a financing agreement they usually point to the same thing. The remittance is the scheduled payment you send to the funder, and each one reduces what you owe until the balance is repaid.
How often are business remittances made?
It depends on the agreement. Common schedules are daily (each business day) or weekly. The frequency and amount are both stated in your contract.
What does a daily remittance mean on a merchant cash advance?
It is the fixed sum withdrawn from your bank account every business day, typically by ACH, until the agreed total is paid down.
Can a remittance amount be lowered?
Sometimes. MCA relief works by lowering the daily or weekly payment amount to ease cash flow. It changes the size or timing of the remittance but does not eliminate the underlying balance owed, and no outcome is guaranteed.
Where do I find my remittance amount?
It is written into your funding agreement, usually near the payment schedule, and you can also see the withdrawals on your bank statement. If the two do not match, contact your funder to confirm.
