Merchant cash advance Qualifications and Guidelines are extensive. The amount of total monthly deposits is the #1 qualifying factor in being approved for an mca cash advance. How do you qualify? Apply below now.
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The biggest qualifying factors are: Total monthly deposits, time in business, credit, cash flow along with several more profile characteristics further below.
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FAQ Frequently asked questions on Merchant Cash Advance qualifications and guidelines
What are the most important qualifications for approval?
The average of the last 3 months total deposits to your business checking account is the most important guideline. Also critical is the average daily bank account balances along with time in business and industry type. Limited overdrafts and negative balances are also qualifications needed.
How important is credit?
Bad credit and low credit scores usually do not make a difference between an approval or decline. However, a better credit score helps your business get more money, longer terms and better rates.
Is a minimum time in business needed?
At least 3 months along with bank statements are needed. If your company has just under 3 months since starting, you can send a month to date daily activity printout of the current activity to request an offer.
Top Customer Profile Issues
500 + bureau score
Many programs have a minimum credit score requirement of 500. Some programs require a credit score of 525. Other programs either do not have a credit bureau score requirement, or have a 550 minimum.
51% + Ownership
Many MCA Merchant Cash Advance programs and lenders require at least 51% ownership to close cash advance funding or other loans. Another requirement under some programs is to have any owner with 25% or more ownership listed on the application and also be a signer at closing.
Minority ownership means any owner with less than 50% ownership. This can also mean an owner that has between 1% and 49% ownership in a business or enterprise. Another option some lenders offer is to approve and close financing with owners who are less than 50% owners. However, this is not the norm and also rare and hard to find.
3 months time in business
Many lenders have a minimum time in business requirement of 3 months. Others have a 6 or 1 year guideline.
Less than 3 months time in business
Some mca merchant cash advance companies do not have a minimum time in operation requirement but need at least 2 months proof of income or revenue. These are considered start ups. Find more information on start up businesses here.
$10,000 or more per month in deposits guideline.
A high percentage of funders require the merchant to have a minimum of $10,000 or more in deposits every 30 day cycle. Some merchant cash advance companies offer funding programs that demand only $5,000 to $7,500 minimum deposits. However it is harder to find good options with less than the $10,000 floor.
We have programs that only require $4,000 + per month in deposits.
5 Overdrafts or NSF’s or less per month
Another frequent requirement is for the business to have no more than 5 Overdraft or NSF occurrence items per month. In 2017, some MCA Merchant cash advance companies began to offer programs with 7 or 8 Overdrafts or NSF occurrences per month allowed, but this is also not common.
Less than 5 Deposits per month
Most funders require 5 or more deposits per month. A few require less, such as 3 or 4, but the majority still require 5. Merchants complain that they were denied for too few deposits. How can that happen? To find out the answer, we need to look at what lenders and mca merchant advance companies consider a “deposit”
What is the definition of: Number of real business deposits per month?
Those are deposits that are generated from sales or real company operations. Deposits are not the following:
1) Small dollar amounts such as less than $100. This dollar figure can be higher, even $200 or $300 and funders may not consider that deposit because the dollar amount is too low.
2) Transfers from savings accounts or other accounts are also not considered deposits. The reason for this is that the funder does not know if the original source of those transfers are from real business revenue.
3) Credits and rebates are not true revenue.
Most mca merchant cash advance companies have industries that they will
not lend to and restrict funding to. You can ask in advance if your industry is one of those types of businesses they will not fund. For more information see a list of restricted industries here
Many of the criteria listed above are minimum guidelines needed for approval. Many lenders and merchant cash advance companies list a minimum criteria but may still decline the merchant for other reasons.
In their analysis, if your company profile meets merchant cash advance qualifications and guidelines criteria, they will consider the request, but might still not approve it. Increase your chances of getting money by knowing the qualifications and guidelines ahead of time.
We specialize in identifying which mca programs busineess will qualify for.
Review tips on qualifying and lowest rates and terms on a 2nd position or 3rd position merchant cash advance. Read the steps and tips further below to get approved with the best mca terms with the lowest rates.