MCA Hardship Program
Hardship programs offer structured payment relief to MCA merchants experiencing documented temporary distress — natural disasters, health emergencies, supply chain disruption — through formalized accommodation processes distinct from standard payment modifications.
Why This Matters
Hardship program structure: formalized application process (merchant documents specific hardship cause and expected duration), defined relief options (payment reduction, payment deferral, term extension), bounded duration (typically 30-90 days with possible extension), and clear exit criteria (return to standard payment terms when hardship resolves). COVID-era hardship programs became industry standard; many funders maintained them post-pandemic for individual merchant hardships. Hardship programs reduce charge-off rates 15-25% versus immediate default for documentedly temporary distress.
Frequently Asked Questions
Frequently Asked Questions
How are hardship programs different from payment modifications?
Hardship programs are bounded (specific duration, specific cause) while payment modifications are open-ended. Hardship programs typically require formal documentation of cause; modifications can be granted on revenue trajectory analysis alone.
What documentation do hardship programs require?
Typical requirements: written description of hardship circumstances, supporting documentation (medical records, insurance claims, supply chain communications, government emergency declarations), recent bank statements showing impact, and projected timeline for resolution.