Why deposits are not revenue
The bank's "total deposits" line counts every credit to the account. Plenty of those credits are not sales: the owner moving money in from savings, the proceeds of last month's advance, a refund from a supplier. None of it will be there next month to make payments, so funders size offers on true revenue, not deposits.
If you submit gross deposits, the underwriter recalculates, finds a smaller number and trusts the rest of your file a little less. Doing the work first means fewer surprises and offers that hold.
What to strip out
- Transfers between the merchant's own accounts: savings to checking, one business account to another. Look for "Online transfer from", "TRF FROM" or a matching account number.
- Loan and advance proceeds: a large one-off credit from a funder or lender, usually a few days before a new recurring debit starts.
- Refunds and returns: money back from vendors, tax refunds, insurance payouts, returned purchases.
- Owner injections: the owner putting personal money in, often labeled with the owner's name or a personal account.
- Reversed and returned deposits: a customer check that bounced is debited back; take it off the deposit it reversed.
- Chargeback reversals: a card dispute the merchant won comes back as a credit, but it was counted as a sale once already.
When in doubt, ask
Some credits are ambiguous: a deposit from a sister company, a large check from one customer. Ask the merchant and write the answer in your notes. Underwriters accept an explained exclusion far more readily than an unexplained number.
The worked month
A landscaping company's September statement shows $98,950 in total deposits. Here is how those credits break down.
| Credit | Amount | Revenue? |
|---|---|---|
| Card processor settlements (22 batches) | $38,400 | Yes |
| Customer ACH payments and checks (19 deposits) | $21,750 | Yes, less the bounced check below |
| Transfer from the business savings account | $8,000 | No: own money moved |
| Funding deposit from an advance | $24,250 | No: advance proceeds |
| Owner deposit from a personal account | $5,000 | No: owner injection |
| Refund from an equipment supplier | $1,150 | No: refund |
| Chargeback reversal from the card processor | $400 | No: already counted as a sale |
| Total deposits | $98,950 |
One more line sits in the debits: a $1,200 customer check from the 19 deposits was returned unpaid on the 24th. It was counted in the $21,750, so it comes off revenue too.
excluded credits = 8,000 + 24,250 + 5,000 + 1,150 + 400 = 38,800 returned deposit = 1,200 true revenue = 98,950 - 38,800 - 1,200 = 58,950 check: 38,400 + 21,750 - 1,200 = 58,950
True revenue is $58,950, about 60% of the deposit total. An offer sized on $98,950 would have been roughly two-thirds too large, and the holdback on it would have looked half as heavy as it really is.
Carry it through every month
Repeat the exercise for each month in the lookback and the MTD. Then look at the pattern of exclusions, not only the totals. An owner topping up the account every month to cover payroll says something about cash flow. A funding deposit two weeks before the newest statement means a new position the merchant may not have mentioned.
Keep both figures per month, gross and true, with a one-line list of what you removed. Underwriters read that list, and it lets anyone on your team rebuild the number later.
How the CRM helps
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. Enter Total deposits and True revenue side by side so the gap is visible, and put your exclusion list in the month's notes.
Holdback, the affordability check and lender matching all use true revenue, so a correction flows through to the shortlist. Test the result with the free holdback calculator.
Questions
Should transfers from the owner's personal account count as revenue?
No. Money the owner puts in from a personal account is an injection, not sales, and it will not necessarily be there next month. Strip it from true revenue and note it, because regular top-ups also tell the funder something about cash flow.
Do card processor deposits count as true revenue?
Yes, settlements from a card processor are sales. Take off any chargeback reversals or adjustments that were already counted, and check that processor deposits on the bank statement line up with the processor's own monthly statement.
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