repayment
ACH Debit
An ACH debit is an electronic withdrawal from a business bank account used to collect fixed daily or weekly loan payments.
Definition
What it means.
Automated Clearing House (ACH) debits are the primary repayment mechanism for revenue-based funding and most short-term business loans. Unlike a holdback, ACH debits are fixed in dollar amount, $500/day, or $2,500/week, and post on a predictable schedule.
ACH debits require a signed authorization at funding. If your account balance is insufficient on a debit day, the ACH will bounce (NSF) and most lenders will either retry or charge a fee. Stopping an ACH without notifying the lender in writing is typically a default trigger under the funding agreement.
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