What funders actually look at on your bank statements.
An MCA decision is made off five numbers in your bank statements. Here's what they are, what triggers an auto-decline, and what you can fix before you apply.
If you're reading this, you've probably been told some version of: "Just send your last three months of bank statements and we'll get back to you." Then you wait, and the answer comes back as a number — or a no — with no explanation of how the underwriter got there.
The honest version: in MCA underwriting, the bank statements are the file. There is no credit pull, no tax return, no business plan review. Funders look at five numbers in your statements, and those five numbers decide whether you fund and at what factor.
This guide is the inside view. We've worked enough deals to know what each funder's underwriter is actually pulling. Below: the five numbers, the thresholds that trigger declines, and the things you can quietly fix before you submit.
01Monthly deposits — the revenue number
This is what every funder calls "revenue." Not your accountant's number. The total of credits hitting your operating account each month.
Most underwriters compute this three ways and pick a conservative blend: the average of your last three months, the lowest of the three, and a trended figure if revenue is climbing or dropping. The number they end up with is what your advance amount is sized against.
Rule of thumb: most MCAs come in at 0.8x to 1.5x of monthly revenue. A $50K/month business gets sized for $40K to $75K. A business doing $150K/month is in $120K to $225K territory. Above 1.5x of monthly revenue and most funders pass — the daily payment math no longer works for the merchant.
What gets stripped out
- Inter-account transfers — moves between your own accounts get backed out. Underwriters check the memo line.
- Loan proceeds — incoming wires from another funder, an SBA disbursement, or a personal-to-business loan don't count as revenue.
- Refunds and chargebacks reversed in — these net to zero, not added.
- Returned items — anything that bounces gets backed out of the deposit total.
The functional revenue number is usually 10–20% lower than the raw "credits" line at the top of your statement. Plan accordingly.
02Average daily balance — the cushion test
Average daily balance (ADB) is the single most predictive number for MCA risk. It's also where most merchants don't realize they're being scored.
Underwriters look at your ADB for each of the last three months. The math is simple: closing balance for every business day, summed and divided by the count of business days. Your bank statement usually prints this near the bottom of each page.
Here's the rough scale most funders use:
| ADB as % of monthly revenue | Read |
|---|---|
| ≥ 15% | Strong cushion — best paper |
| 8–15% | Standard — most deals fall here |
| 3–8% | Tight — higher factor, smaller advance |
| < 3% | Auto-decline at most Tier 1–2 funders |
A $50K/month business with a $7,500 ADB (15%) is in great shape. The same business with a $1,500 ADB (3%) is a hard sell — the funder is looking at razor-thin margin between revenue in and outflows out, and any disruption defaults the advance.
03NSFs and overdrafts — the trust test
NSF (non-sufficient funds) hits are how funders measure operating discipline. One every couple of months is forgivable. Five in a single month and you fall off the Tier 1 list entirely.
| NSFs per month | Read |
|---|---|
| 0–1 | Clean |
| 2–4 | Manageable, may impact factor |
| 5–7 | Tier 2–3 territory, factor 1.40+ |
| 8+ | Auto-decline at most funders |
What counts as an NSF: returned ACH debits, bounced checks, declined card payments your bank charged you for. Each one shows up on your statement as a fee with a specific code (often labeled "OD FEE" or "NSF FEE" or "RETURN ITEM FEE"). Underwriters search for these by keyword.
What doesn't count: courtesy overdrafts your bank covered without a fee. Funders only count the ones the bank declined or charged a fee for.
04Negative days — the worst-case test
A negative day is any business day where your account ended below zero. This number tells the funder how often you operate without runway. It's the most punishing of the five.
Most Tier 1 funders cap at 2 negative days per month. Tier 2 caps at 4. Beyond 5 negative days in any of the last three months, you're looking at Tier 3+ or a decline. The factor scales with this — a single month with 6 negative days can take you from a 1.30 factor to a 1.42.
This is also where merchants get surprised. You can have a $50K/month business with a "good" balance most of the time, but if there are five days where you ended at –$200 because of timing, that pattern reads as risk to an underwriter who has seen it precede default before.
05Existing MCA payments — the position test
Funders look at your statements and search for the fingerprint of existing advances. They will find them whether you disclose or not.
What they look for:
- Daily ACH debits in the $200–$2,000 range, Monday through Friday, with merchant-name patterns matching known MCA funders (LCF, Kapitus, Yellowstone, Reliant, Forward Financing, etc.)
- Weekly debits at higher amounts (some funders use weekly instead of daily)
- Recent UCC filings — they cross-reference the Secretary of State records for any active funding-company filings against your business name
The position math:
| Active positions | Funder strategy |
|---|---|
| 0 (clean) | Submit to Tier 1 funders. Best rates, factor 1.20–1.30 typical. |
| 1 position, > 50% paid down | Renewal with current funder, or payoff with new advance. Tier 1–2. |
| 1 position, < 50% paid down | Payoff plus new money. Tier 2 only. Factor 1.35+. |
| 2 positions | Consolidation if possible. Tier 2–3. Factor 1.40+. |
| 3+ positions | Very limited. Tier 3–4 only. Factor 1.45+. Most funders pass. |
Don't hide positions on the application. The fastest way to a hard decline is to disclose zero positions on the app and then have the underwriter find $700/day in MCA debits on the statements. That's a credibility hit you don't recover from. List everything; let the broker handle the framing.
The self-audit checklist
Before you submit anything, run your own statements through this list. Most of these you can fix in 30–60 days.
- Print the last 3 statements. Don't pull them on screen — print them. You'll catch things on paper you'd miss scrolling.
- Add up monthly deposits. Subtract any inter-account transfers, loan proceeds, refunds. The honest number is your underwriting revenue.
- Find the average daily balance line on each statement. Calculate it as a % of revenue. Is it above 8%?
- Search for "NSF," "OD FEE," "RETURN" — count the hits. More than 4 in any single month is a problem.
- Look at the daily balance columns. How many days ended negative across the three statements? Aim for 0–2 per month.
- List every recurring debit you don't recognize. If any look like MCA payments, that's a position you need to know about before the funder finds it.
- If anything looks bad: wait 30–60 days, fix it, then apply. Two clean months in front of a problem month moves your tier.
The cost of fixing on the front end is one to two months of deal delay. The cost of submitting bad statements is a higher factor for the entire term of the advance — and that's measured in tens of thousands of dollars on a $100K deal.
What we do with this
When your statements come into Westline, the first thing we do is run this same audit before deciding which funders to send to. We don't shotgun your file to a list of 30 funders — that creates UCC pings, alerts every other funder to your inquiry, and damages your file.
We pick the two or three funders most likely to fund your specific profile, send the file to them first, and only widen the list if those come back light. That's how a decent file gets a 1.28 factor instead of a 1.42.
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