Declined For Drop in Month To Date Revenues? 7 Ways to Fix Your MTD

Was your business loan declined for a drop in month to date revenue?   Review 7 ways to improve your month to date statement now and get approved as soon as possible by Applying below!

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1. Understand your Month To Date Statement.
2. Why were you declined for your MTD? 
3. Total Deposits.
4. Average Daily Balance. 
5. Number of Deposits.
6. Overdrafts or NSF’s.
7. What can I do?

7 Ways to Fix a drop in month to date deposits and get approved ASAP!

1.  What do lenders do with a Month To Date Statement? 

A Month To Date statement is used to review your cash flow as of the beginning of the month, or your most recent cycle date.  Follow the link here to get a Month To Date (MTD) Statement in a PDF form.

2. Why were you declined for your Month To Date?

The month to date statement used to decline your business will have lower than average deposits and be weaker overall than statements in prior months.   Lenders ask for recent statements when applying and do not usually ask for information on the incomplete current month’s cycle

They only request a month to date if it is close to the end of the month, or if the most recent month was weaker than the ones prior.   After the 20th, lenders may ask for the current cycle business account activity statement because a lot may have changed in those last 3 weeks.

Expect a request for the current month when the last full statement was lower than average.   Lenders are looking for trends in your business revenue, especially negative ones.    Declines are not the end of the line.     Consider the top decline reasons as well as other loan types such as a loan against equipment.

3. Total Deposits in the current month.

Your current month’s total deposits from business revenue is the most important information mca lenders review in the current statement cycle.

Prorate your total deposits to estimate what the full numbers will be for the entire month.

Example:

Your company had $35,000 in revenues from March 1st through March 12th.    What is the company be expected to do for the whole month if they maintain the same revenue pace for the rest of the month?

$35,000 X (31/12) =  $90,417.     To breakdown the math in simpler fashion,  31/12 = 2.58333.    Since there are 31 days in March and it is the 12th of the month, the fraction to calculate a prorated month is 30/12.    To express that as a % of the month, 1/2.5833 = .387.  This means that .387% of March has gone by.

Almost the same prorated monthly amount is derived by dividing the $35,000 month to date deposit instead of multiplying, as follows:

$35,000 % .387 =$90,439.   The $22 difference is due to rounding.

4. Average Daily Balance.

Why is it important?  When your account’s average daily balance is low, then payments are more likely to bounce.

Average balances below $1,000 and especially below $500 are red flags in credit review and will get your request declined fast.
Work hard to keep a minimum balance of $1,000 and higher because it increases your chances of approval.

Lower average daily balances in the current month are very closely looked at in the review process.

5. Number of Deposits.

At least 5 deposits per month are desired for cash advances.   Other types of loans do not have this requirement, but more deposits are better.

More deposits per month means more customers and often more frequent payments from customers.

6. Overdrafts or NSF’s.

Overdrafts and NSF occurrences hurt the most in the current month.   Many customers say they do not want to keep money in the account.

There is a difference between not keeping excess money in an account and having overdrafts because of it.     Negative balances come from not having enough money and bad money management.

7. What can you do about a drop in month to date sales during the month?

Try to increase your deposit totals before the end of the month.  Deposits made just prior to the end of the statement cycle instead of the first day or two of the next one help the current month’s numbers.

Don’t let your balances get too low causing returned payments that show as NSF or overdrafts.

Ask what you need to have for a chance at an offer this month and you may be given target numbers.   These will let you know if the numbers are achievable.   If all else fails, consider a micro business loan.

Apply Securely Now

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Call 919-771-4177 for more info.

FAQ’s: Drop in month to date sales

Can my business be declined for low current month’s sales? 

Your business can be declined for having a drop in revenue even in the current month that is less than a 30 day cycle.

Is there anything I can do now to get approved?

Follow the cash flow strategy outlined here gives your business a chance of getting funding in the current month.  There is still be time to correct the numbers in the same statement cycle.

Are there options that do not look at the month to date
deposits?

There are asset based options with a monthly payment that usually do not look at current month’s deposits.    Those merit a close look for businesses that cannot wait for their cash flow to recover.

Conclusion

Declines for a business loan due to a drop in month to date revenues is a real possibility.   Most lenders do not look closely at current 30 days, but some do.

Understanding what the threats to an approval are and the actions to take.   Help your business steer clear of an unexpected turndown due to dropped revenues in the last 1 – 3 weeks.

Keeping a close eye on total deposits, average balances and overdrafts in the current month can make the difference between an approval and a last minute decline.