Stripe put 25% reserve on my account - how do I plan cash flow?

Just got the dreaded email from Stripe. They're putting a 25% rolling reserve on my account with a 90-day hold period. We're doing about $80K/month in recurring SaaS revenue, so that's $20K/month they're holding.

Our chargeback rate is 0.2% which I thought was fine?? They said it's because we're in a "higher risk category" (we sell B2B software to small businesses).

Questions:

• How do other founders plan cash flow around reserves?
• Can I negotiate the percentage down?
• How long until they typically remove reserves?

I have payroll in 2 weeks and this is really throwing off my projections.

I help startups with this exact situation. Here's how to think about it:

Cash flow planning: At $80K/month with 25% reserve and 90-day hold, you'll have $60K of "trapped" cash at any given time (3 months x $20K). Model this as a one-time reduction in working capital. After month 3, you'll get $20K released each month while $20K new is held - so it becomes cash-flow neutral.

Short-term bridge: For the first 90 days, you need to cover that $60K gap. Options: credit line, founder loan, or invoice factoring.

Terms.Law has a reserve calculator that models this out month by month. Helped one of my clients visualize exactly when the cash crunch would hit.

0.2% chargeback rate is actually fine - Visa's threshold is 0.9%. They're likely flagging you for something else:

• Rapid growth (did your volume spike recently?)
• Average transaction size changes
• Customer segment (SMBs have higher failure rates)
• Industry code classification

You CAN negotiate reserves. Ask for a call with their risk team. Points to make:

1. Your historical chargeback rate (low)
2. Subscription model = predictable cash flow
3. Customer tenure data (low churn = stable)
4. Offer to provide additional documentation monthly

I've seen reserves get reduced to 10-15% with good documentation.

Been through this. The reserve usually gets reviewed after 6-12 months of good history. Mine went from 20% to 10% after 8 months, then removed entirely at month 14.

Pro tip: set up a secondary processor NOW while you're in good standing. Braintree, Adyen, or even a traditional merchant account through your bank. If Stripe decides to terminate later, you'll have a backup ready.

Also, sweep your Stripe balance to your bank daily. Don't let money sit there longer than needed.

Thanks everyone. @CFO_Fractional that calculator was really helpful - I can see exactly how the cash flow works now. The visualization showing month-by-month held vs released funds made it click.

Going to request a call with Stripe's risk team tomorrow. Will update on whether they budge on the percentage.

Quick legal note: Stripe's Terms of Service (Section 7) gives them broad discretion on reserves, but they can't act arbitrarily. If you have documentation showing your business is low-risk and they're applying reserves inconsistently compared to similar merchants, that could be worth raising.

California's implied covenant of good faith applies here. Stripe can't use reserves punitively or as a backdoor way to exit a merchant relationship.

That said, 25% for a B2B SaaS with 0.2% chargebacks does seem aggressive. Definitely push back through proper channels before escalating legally.

UPDATE: Had the call with Stripe. They agreed to reduce the reserve to 15% after I showed them:

• 12-month chargeback history (consistently under 0.3%)
• Customer retention metrics (85% annual retention)
• Average customer lifetime value data
• Our refund policy and how we handle disputes proactively

They also said they'll review again in 6 months. Not ideal but way better than 25%.

For anyone else dealing with this: documentation is everything. The more data you can show about your business stability, the better your negotiating position.

Great outcome! For others reading this thread later - the key is treating Stripe (or any processor) like a bank relationship. Regular communication, proactive documentation, and demonstrating you understand their risk concerns goes a long way.

Also worth noting: if you're using Stripe Billing for subscriptions, make sure your dunning settings are optimized. Failed payments that become chargebacks hurt you more than failed payments that just churn.