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Advance underwriting is not credit underwriting with looser standards. It asks a different question — can these receipts carry a daily remittance without breaking — and that changes what matters.
The order things get checked
| # | What | Why it matters |
|---|---|---|
| 1 | Average daily balance | Whether a remittance can be taken without overdrawing |
| 2 | Deposit consistency | Whether the revenue is dependable or lumpy |
| 3 | Negative days | Direct evidence of whether the account already runs tight |
| 4 | Existing positions | How much of the receipts is already committed |
| 5 | Time in business and industry | Outer bounds on offer size and price |
Notice what is not on that list. Personal credit is usually a screen rather than a driver — it can disqualify at the extremes and rarely improves an offer much in the middle.
What the statements actually reveal
- Average daily balance is the headline. A merchant averaging $2,000 cannot service a $500 daily remittance regardless of monthly revenue.
- Deposit count and pattern. Twenty deposits a month reads as steady trading; three large ones read as project-based and price worse.
- Negative days. More than a handful across four months is the fastest route to a decline, and it is the number merchants most often forget you will see.
- Other remittances. Daily or weekly debits to known funders reveal positions whether or not the merchant disclosed them.
- Transfers between accounts. Circular movement inflating apparent revenue is caught quickly and damages the file badly.
What a broker can actually influence
Not the numbers. What you control is whether the file explains them.
- Context for anomalies. A month of low deposits with an explanation is a different file from the same month unexplained.
- Completeness. Four consecutive months, all pages, legible. Missing pages read as concealment even when they are carelessness.
- The right funder. Placement is where the judgement lives — some funders take restaurant paper others will not touch, and knowing that is what separates shops.
- A realistic ask. Requesting $150,000 against $40,000 monthly revenue signals you did not read the statements either.
Questions brokers ask
What do MCA underwriters look at?
Bank statements first — average daily balance, deposit consistency, negative days and existing positions — then time in business and industry as outer bounds. The question is whether the receipts can absorb a daily remittance, not whether the owner looks creditworthy.
Does credit score matter for a merchant cash advance?
Far less than in traditional lending. It usually acts as a screen that can disqualify at the extremes rather than a driver that improves an offer in the middle. Revenue consistency and existing positions move terms much more.
How many negative days will kill an MCA deal?
It varies by funder, but more than a handful across four months of statements is the fastest route to a decline. Negative days are direct evidence the account already runs tight, and they are the figure merchants most often forget the funder will see.
Why do existing positions affect the offer so much?
Because each open advance already commits part of the daily receipts. A merchant carrying three positions has less capacity to service a fourth, so the offer shrinks and the factor rises. Undisclosed positions are worse still — they are found in the statements and cost the submission.
What can a broker do to improve a file?
Not the numbers, but whether the file explains them. Provide context for anomalous months, submit four complete and legible months, make a realistic ask against the revenue, and place it with a funder that actually wants that paper.
Reference
Holdback and daily paymentThe holdback a funder is solving for, and the term that falls out of it.
Alex Makowski
Founder, Infinite Bookings
Runs the lead generation operation behind Infinite Bookings — paid traffic, the funding application, and the delivery pipeline that puts records into brokers’ CRMs.
Reachable directly at alex@infinitebookings.com or 732-609-7182.