What the funder asks for
For most advances and short-term business loans, the funder wants the merchant's three or four most recent full months of business bank statements, every page, plus a month-to-date statement covering the current partial month. Larger deals and lines of credit often ask for six months, and some add processor statements or tax returns.
Why so few months? An advance is repaid out of the next several months of deposits, so the funder cares most about how cash moves right now. Three or four months shows a pattern; the MTD shows whether that pattern still holds this week. A merchant who looked fine through August and has been overdrawn since the 3rd of October is a different deal.
All pages, all accounts
Missing pages and missing accounts are the most common reason a file comes back. If the merchant deposits into two business accounts, the funder wants both, because revenue split across accounts looks like half the revenue otherwise.
The figures and what each one tells a funder
| Figure | What the underwriter learns |
|---|---|
| True revenue | How much real sales money comes in each month. This sizes the offer and is the base for holdback. |
| Number of deposits | Whether revenue is spread over many customers or rides on a few large checks. Many small deposits are steadier. |
| Average daily balance | Whether the merchant keeps a cushion or spends every dollar as it lands. A thin cushion means a fixed daily debit is more likely to bounce. |
| NSFs and overdrafts | How often payments already fail. Each one is a preview of what may happen to the funder's debit. |
| Negative days | How many days the account ended below zero. Read with NSFs and ADB. |
| Existing positions | Which other advances or loans are already debiting the account, and how much of revenue they take. |
| Revenue trend | Whether deposits are rising, flat or falling month to month. A falling trend shrinks offers even when the average looks fine. |
| Ending balance | Where each month finishes. Useful, but easy to dress up by timing a deposit; underwriters weigh ADB more. |
- True revenueTrue revenue is a merchant's real monthly sales on the bank statements: total deposits minus transfers, loan and MCA proceeds, refunds, reversals and owner money.
- Average daily balance (ADB)Average daily balance (ADB) is the mean of a bank account's end-of-day balances over a month. Funders use it to judge whether a merchant can carry daily payments.
- 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.
- PositionsA position is one open cash advance on a merchant's account, numbered in the order taken: first position, second position and so on.
A reading order that saves time
Underwriters move fast, and a processor who reads in the same order catches the same problems before the file goes out.
- Check the basics. Business name and account number match the application, the months are consecutive and recent, and every page is there.
- Scan the debits for other funders. Recurring daily or weekly ACH debits tell you the position count before you do any math. See spotting existing positions.
- Work out true revenue per month. Strip transfers, funding deposits, refunds and owner money. See true revenue vs deposits.
- Count NSFs and negative days for each month, newest first.
- Note the ADB and compare it with the payment the merchant would carry.
- Look at the trend and the MTD. Is the newest month better or worse than the oldest?
- Write down anything odd before you forget it: a huge one-off deposit, a new account, a gap in dates.
A quick example
A flooring installer applies for $40,000. Over four months the processor finds average true revenue of $71,000 (gross deposits averaged $83,000, the rest was transfers from savings), 34 deposits a month, ADB of $9,800, one NSF in total and zero negative days, and one existing weekly position. The trend is flat and the MTD looks like the prior months.
That file reads well: steady revenue from many customers, a real cushion, almost no failed payments. The one question an underwriter will ask is the existing position: how much is left on it and what it costs per month. Answer it in the submission and the file moves faster.
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.
From those figures the deal shows averages across the months entered, the revenue trend, holdback and the room left for a new payment, and lender matching reads the same numbers. See bank statement analysis for the full list.
Questions
How many months of bank statements do MCA funders want?
Most ask for the three or four most recent full months plus a month-to-date statement. Larger deals and lines of credit often ask for six months. Each funder sets its own requirement, so check its submission guidelines.
Why do funders want a month-to-date statement?
It shows whether the pattern in the full months still holds right now. New NSFs, a new advance or a sudden drop in deposits in the current month can change the offer or lead to a decline.
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Related lessons
- Reading bank statementsTrue revenue vs deposits: a worked exampleTotal deposits overstate what a merchant earns. A worked month showing which credits to strip (transfers, advances, refunds, owner money) and the arithmetic.
- Reading bank statementsSpotting existing positions on bank statementsFind other advances on a merchant's statements: recurring ACH debits, descriptors, daily and weekly patterns, what is left to pay, and why disclosure matters.
- Processor playbookEntering the bank statement analysisType each month's deposits, true revenue, balances, NSFs, negative days and MCA debits into the deal's statement grid, and read the summary lenders match on.
- Lender matching and submissionsHow lenders decide which deals they takeEvery funder works from a box: minimum revenue, time in business, credit, positions, industries and states. How the box works and why it keeps moving.