So you are thinking about a business cash advance but want to know very simply, will I get approved? Funding companies look at things differently than a bank for many reasons. I will give you a glimpse of how they think. Other than credit there are many things they look at. Here are some items most companies will look at.

  1. Merchant Statements: Companies will require between 4 months and 12 months of merchant statements. Your processing history will give them an idea as to how consistent the volume is and what they can expect in the next 6 to 12 months. Underwriters are looking at a number of factors including average ticket, number of batches per month, and number of charges per month. Almost all companies typically like to see a minimum of 14 batches per month although one I know of doesn’t look at this at all. So if you are a marina that processes its slip rentals on the first of every month, most won’t like it but one will. They also want to see how your volume is trending. If they look at last February and compare it to this February, how does it compare? If your volume is down 50%, that may concern them. If it is a slight decline, flat, or growing then they may be ok with what they see.

  2. Bank statements: They will look at bank statements to see a number of different things. If you have a number of NSF’s, that is not a good thing. If you had a tough time 5 months ago but have since cleared it up, they will often times take that into account. They will also look at average balance to see if it looks like you are on the brink of going out of business.

  3. Lease agreement: All companies will want to see the lease for your business and make sure you will still have a place to do business during the repayment period. If the landlord doesn’t renew your lease and kicks you to the curb, you are effectively out of business and can’t repay the advance.

  4. Landlord interview: All companies will perform a landlord interview and make sure your rent is current and that your lease is the same as you sent over. If your lease is late, you may still get funded but they may make a stipulation that you must pay the landlord first, with the remaining funds going to you.

Underwriting guidelines are significantly different for a merchant cash advance and much more lenient than a bank. If you need funds for your business, strongly consider a business cash advance.