Your bank statements tell a story. MCA funders read that story to determine whether your business is a good risk. Understanding what they look for helps you prepare and improves your chances of approval.
Monthly Revenue Volume
The first thing funders check is how much money flows through your business account each month. This is the primary factor in determining how much you can borrow.
What they want to see: Consistent monthly deposits totaling at least $10,000. Most MCA funders have this as a minimum threshold. Higher monthly revenue means higher advance amounts available.
What raises red flags: Significant month-to-month fluctuations without explanation. Funders prefer predictable revenue patterns. If your revenue dropped significantly in the most recent month, be ready to explain why.
Average Daily Balance
Beyond total deposits, funders look at your average daily balance. This indicates whether your business maintains healthy reserves or operates paycheck to paycheck.
- Healthy range: An average daily balance of at least $1,000 to $2,000 shows financial stability
- Concerning: Accounts that consistently hover near zero or go negative
- What they learn: Low average balances suggest tight cash flow and higher default risk
Deposit Consistency and Sources
Funders analyze the types and frequency of deposits hitting your account.
What they want to see: Regular, predictable deposits from your core business activities. Multiple small deposits are better than a few large ones, as this suggests ongoing customer activity.
Problematic patterns:
- Large one-time deposits that do not match your typical business pattern
- Frequent deposits from the same customer (suggests a single client relationship)
- Personal deposits mixed with business funds (raises questions about business legitimacy)
- Irregular deposit timing with long gaps between deposits
Negative Balance Events
NSF (nonsufficient funds) fees and overdrafts are major red flags for MCA funders.
What they want to see: Zero or very few NSF occurrences in the statement period. Most funders allow 1 to 2 small NSF items, but more than that significantly hurts approval chances.
What raises red flags: Multiple NSF items, particularly in the most recent months. Recurring overdrafts suggest poor cash management and higher risk of default.
Pro tip: Review your last 3 to 6 months of bank statements before applying. If you see NSF items, address them and wait until they are older before applying.
Average Daily Processing
If you accept credit card payments, funders calculate your average daily credit card batch amount. This is separate from your bank deposits but equally important for MCA sizing.
What they want to see: Consistent daily credit card processing that aligns with your stated business type. For example, a restaurant should show multiple batch settlements per day.
What raises red flags: Processing volume that does not match your business description or is significantly lower than industry averages for your business type.
Returned Items and Chargebacks
Funders scan for returned payments and chargebacks, which indicate customer disputes or non-payment issues.
- ACH returns: Repeated failed ACH transfers suggest customers are not paying
- Chargebacks: High chargeback rates signal reputational or product issues
- What they mean: Funders worry that similar issues could affect your ability to repay
Average Ticket Size
The average size of each deposit matters more than you might think.
What it reveals: A mix of small and medium transactions is healthy. Only large transactions suggests few customers, creating concentration risk. Only small transactions might suggest low-margin business.
How to Prepare Your Bank Statements
Before applying, review your statements with a lender mindset:
- Reconcile deposits: Ensure deposits match your processing statements and expected revenue
- Address NSF items: Clear up any recent overdrafts or returned items
- Separate personal and business: Remove any personal transactions from business accounts
- Explain anomalies: Be ready to explain any unusual deposits or withdrawals
- Keep it clean: The most recent 3 months matter most, so maintain healthy account behavior
What If Your Statements Are Not Ideal?
Even if your bank statements are not perfect, you still have options:
- Some funders are more flexible: Certain MCA funders specialize in working with businesses that have challenged banking history
- More time in business helps: Older statements showing a longer positive track record can offset recent issues
- Alternative data: Some funders look at accounting software data in addition to bank statements
- Smaller advances: Requesting a smaller amount relative to your revenue improves approval odds
Get Started
Understanding what funders see in your bank statements helps you present your business in the best possible light. Velica Capital works with funders who look at the full picture, not just the numbers on the surface.
Our application requires only basic information to get started. We will walk you through what documentation is needed and match you with funders best suited to your business profile.