Merchant Cash Advance Qualifications

Man writing on a checklist of qualifications works with small businesses struggling to meet the terms of a merchant cash advance. Qualifying for a merchant cash advance is complicated and depends on several factors. Merchants who fail to maintain those requirements are at risk of default, and that’s where we come in. Our experienced team of specialists regularly helps clients reconcile their merchant cash advances and determine their qualifications.

By understanding the qualifications for obtaining a merchant cash advance, however, you can negotiate more favorable terms and rates and protect the long-term viability of your business. Whether you are considering a merchant cash advance or you are facing a default, you need the informed representation we provide. Please contact our office or complete the convenient intake form today. Our experienced debt relief specialists are available 24/7.

Key Merchant Cash Advance Qualifications

Credit history or credit scores are not an overarching factor when MCA providers decide to advance the money. Instead, they consider the historical and projected revenue of your business — funds collected by debit, credit, or charge cards. 

In short, the most important qualifications for obtaining merchant cash advance include:

  • The average of the last 3 months total deposits in your business checking account
  • An acceptable daily balance of funds in the account
  • Minimum time in business

While this seems straightforward, these are only minimal criteria, and MCA funders also consider the type of business and factors such as limited overdrafts and negative balances. Even if you meet the basic qualifications requirements, your cash advance application may still be denied.

Credit Ratings and Merchant Cash Advances

Customarily, obtaining credit depends on having a good rating, but this is not the case for a merchant cash advance. This alternative source of funding is typically utilized by business owners with a low personal or business credit score or who may not have access to traditional sources of financing (e.g. business loans, lines of credit). 

Although some MCA programs may not have a minimum credit score requirement, others require a minimum score in the 500 – 550 range.  At the same time, a higher credit score allows you to access more money, negotiate longer terms, as well as a lower factor rate, which is not to be confused with an interest rate or APR, and typically means a much higher cost of financing, from 50 to 100 percent! 

Is a minimum time in business needed to qualify for a merchant cash advance?

The minimum time in business required depends on the funder: some require 1 year, some require 3 to 6 months, along with corresponding bank statements. For businesses with less than 3 months in business, the funder may accept a month-to-date daily activity statement of the current month. Finally, MCA companies typically require startups to have at least 2 months of proof of business income or revenue. Regardless of the time in business, remember that MCA providers focus on revenue.

Ownership Qualifications for a Merchant Cash Advance

MCA providers typically require 51 percent ownership interest at a minimum — less than 50 percent interest is considered minority ownership. Funders typically do not close financings with minority owners; however, some MCA programs require any owner with at least a 25 percent or more interest to be a cosigner of the advance. 

Minimum Deposits and Merchant Cash Advances

Generally, merchant cash advance lenders typically require applicants to have a minimum of $10,000 or more per month in business deposits, while some programs require $5,000 to $7,500 per month minimum deposits. 

In addition to minimum deposit amounts, funders typically require 5 to 10 deposits per month from unrelated customers. Merchant cash providers consider a deposit to be revenue the business has generated from sales and operations. 

Deposits that are not considered “business” deposits include:

  • Small-dollar amounts — less than $100 to $300
  • Transfers from savings or other accounts
  • Credits or rebates from other merchants

In any event, funders require the source of a deposit to be from business revenue.

Other Requirements for a Merchant Cash Advance

In addition to the above-mentioned qualifications for an MCA, another frequent requirement is for the merchant to have no more than 5 overdraft or “NSF” occurrence items per month. You should be aware that providers charge exorbitant overdraft fees that can cost merchants their business. Finally, some MCA providers have a “restricted industries” list for businesses in sectors to which they do not make cash advances. 

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If you qualify for a merchant cash advance, remember that the funder will be taking back a significant percentage of your future revenue, in order to pay off the the advance and its interest. Given that a $10,000 merchant cash advance can mean financing costs of $2,500 or more over a 6 – 12-month term, it comes as no surprise that many small businesses default on merchant cash advance agreements.

At, we are dedicated to helping merchants reconcile their cash advances and know how to fight back against unscrupulous merchant cash advance providers. If you are at risk of defaulting on your MCA, don’t delay, contact our office or complete the convenient intake form today so we can get to work reconciling your merchant cash advance.