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A/R Finance & Factoring Terms GLossary

What isAutomated Clearing House (ACH) & ACH Loans

Automated Clearing House (ACH) is a financial network allowing a business to electronically collect payments from their customers either in a single transaction or as recurring payments directly from the customer’s checking or savings account.

The term ACH has also morphed into an ACH Loan. An ACH loan and a Merchant Cash Advance (MCA) are similar. While an MCA loan is really an advance based upon your regular and predictable volume of credit card transactions, the ACH loan is a “cash flow” loan. Instead of looking at your credit card transactions, the ACH lender looks at the average daily balance of your business checking account.

Both ACH & MCA loans tend to be the fastest (good) and most expensive (bad) monies a business can obtain.

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