NSFs, overdrafts and negative days

• NSFNSF means non-sufficient funds: a payment bounced because the account was short. In MCA underwriting, NSF counts per month are a core risk signal.
• Negative daysNegative days are the days in a month when a merchant's bank account ends below zero. Funders cap them because each one risks a returned debit.

Both measure the same worry from different angles: will the funder's fixed debit clear? An NSF is a payment that already failed or was covered only by an overdraft. A negative day is a day the account ended below zero, when any debit would have failed.

• Look for the words. "NSF fee", "Returned item", "Insufficient funds", "Overdraft fee", "OD fee", "Item returned unpaid". Banks word them differently; read a full month before you trust a search.
• Separate fees from returned items. One bad day can produce a returned ACH, a returned check and three overdraft fees. Some funders count each fee; some count each day with an NSF. Record both numbers so you can answer either way.
• Count negative days on ending balances. Use the end-of-day balance. If the statement has no daily balance column, rebuild it from the opening balance and each day's activity.
• Count per month, newest first. A funder reading your notes wants the MTD and the most recent full month before anything else.

Not every NSF weighs the same. Underwriters care most about the latest 30 to 60 days, then the direction. Compare two made-up merchants with the same total of nine NSFs over four months:

Merchant A had a rough June and has recovered; ask what happened (a slow season, a large one-off expense) and put the answer in the submission. Merchant B is getting worse every month, and September looks like a business under strain. Same totals, very different files.

Also look at where the NSFs land. NSFs that line up with an existing funder's debit say the merchant is already struggling to carry that position. NSFs on a payroll day say something else. Clustered NSFs on one or two days read better than NSFs scattered through the month.

There is no industry-wide rule. Each funder sets its own limits, and they change with the funder's appetite. In general terms, the strictest programs want almost no NSFs and no negative days in recent months, many funders accept a few NSFs in the latest month, and some specialize in files with more. Negative days follow the same pattern.

Ask plainly: "I see six returned items in September. What happened that month?" A clear, true answer (a customer paid 60 days late, a one-time tax payment) helps the file. Do not coach the merchant to move money around before the MTD is pulled; underwriters notice sudden transfers that cover a dip, and it reads as window dressing.

In Ferrylend, every deal has a Bank statements tab with a monthly grid per account: Total deposits, True revenue, Number of deposits, Avg daily balance, NSFs, Negative days, MCA debits and Ending balance. The figures are typed in from the statements today; AI parsing of statement PDFs and bank connect are Coming soon. The deal summary averages NSFs and Negative days across the months you enter.

Lender criteria can hold NSF and negative-day limits, and lender matching checks the deal against them, so the shortlist leaves out funders the file would break.