Merchant cash advances have looser underwriting standards than bank loans — but “looser” doesn’t mean no standards. Providers are underwriting the risk that your future revenue will actually materialize. Here is what they look at and how to position yourself for approval.
The Core Requirements
Monthly Revenue
Revenue is the primary underwriting factor. Most providers look at your average monthly gross deposits across the last 3–6 bank statements. Minimums:
| Provider tier | Minimum monthly revenue | Advance range |
|---|---|---|
| Entry-level lenders | $5,000/month | $5,000–$25,000 |
| Mid-tier lenders | $10,000/month | $15,000–$150,000 |
| Larger providers | $15,000–$25,000/month | $50,000–$500,000+ |
What to know: Advance amounts are typically 75%–150% of one month’s average revenue. A business averaging $20,000/month can generally access $15,000–$30,000 on a first advance.
Time in Business
- 3 months: Absolute minimum at most providers; very small advance sizes only
- 6 months: Standard threshold; full range of providers available
- 12+ months: Best rates and largest advance-to-revenue ratios
New businesses (under 3 months) will not qualify anywhere. If you are approaching 6 months, wait — the improvement in terms is typically significant.
Credit Score
MCAs are available to borrowers with credit scores as low as 500, but score affects terms:
| Personal FICO | Typical impact |
|---|---|
| 480–549 | Few options; factor rates at the high end (1.35–1.50) |
| 550–599 | More providers available; 1.25–1.40 factor range |
| 600–649 | Standard terms; 1.15–1.35 factor range |
| 650+ | Best rates; multiple competing offers likely |
Your business credit score (Dun & Bradstreet, Experian Business) is also checked but weighted less heavily than your personal score.
Bank Account Health
Providers scan bank statements for:
- Consistent positive balance — frequent overdrafts are a red flag
- No NSF (non-sufficient funds) items — two or more in 3 months can trigger denial
- Revenue trend — declining revenue over the reviewed period raises concern
- Multiple deposit sources — concentration in one client can be flagged as risk
Three to six months of bank statements are standard documentation.
What Lenders Also Check
Industry: Some industries face restricted access or higher factor rates (see APR vs. factor rate explained) due to historical default rates. High-risk categories include trucking, restaurants (inconsistent revenue), healthcare billing, and anything subject to significant chargebacks (e-commerce, travel). Most general retail, service businesses, and contractors face no industry restrictions.
Existing MCA balance: If you have an active MCA, a second provider will either decline or require a “stacking” agreement. Stacked advances significantly increase default risk — most serious providers will check UCC filings to see if your receivables are already encumbered.
Personal guarantee: A personal guarantee from any owner holding 20%+ of the business is nearly universal. This means your personal assets are on the hook if the business cannot repay.
Documentation You Will Need
Have these ready before you apply:
- 3–6 months of business bank statements (most recent)
- Government-issued photo ID for all owners with 20%+ equity
- Voided business check (for ACH setup)
- Business license or formation documents (sometimes)
- Credit card processing statements (if the MCA uses a holdback structure)
Some providers also request a completed one-page application with basic business info, EIN, and an authorization to pull credit.
How to Improve Your Approval Odds
Increase monthly deposits before applying. If you are just below a revenue threshold, wait until bank statements show a consistent monthly average above the minimum — lenders take the 3-month average, so one strong month does not help much.
Clean up your bank account. Pay down any overdrafts, resolve NSF items, and avoid low-balance periods in the 3 months before applying.
Check your credit report. Request a free report at AnnualCreditReport.com and dispute any errors. A few incorrect negative items could be pushing your score below a rate threshold.
Apply to multiple providers. MCA providers use different underwriting models. A decline from one does not mean you will not qualify elsewhere. Compare our reviewed MCA providers to get multiple quotes, and read how to choose an MCA provider before you commit.
Know your UCC filing status. Search your state’s UCC filings to see if any prior MCA or lender has a blanket lien on your receivables. A provider who sees an existing lien may decline or require the prior advance to be paid off first.
What to Do If You Don’t Qualify Yet
If you are below the thresholds — or if the factor rates you are quoted are too high — consider:
- Business line of credit: Available at 580+ credit and 6+ months in business; typically 8–35% APR
- Invoice factoring: If you have B2B invoices outstanding, factoring converts them to cash at 1–5% per month with no credit score requirement
- Revenue-based financing: Similar to MCAs but sometimes with lower factor rates; requires more established revenue history (12+ months, $15,000+ monthly)
- SBA microloans: For businesses under $50,000 in needs; slower (3–4 weeks) but 7–13% APR
If cost is the concern with MCAs, almost any alternative will be cheaper — see our full guide to MCA alternatives. The real question is whether you qualify and can wait for funding.