The main approval factors for contractor MCA are: (1) $8,000+ average monthly revenue (gross deposits, not net profit); (2) 6+ months in business; (3) 500+ FICO score; (4) active business checking account with consistent deposit flow.
Contractor Guide
What underwriters see in contractor bank statements — including the gap month problem and how to address it before you apply.
Contractor Funding Center
Your average monthly deposits over 3 statements is the base for advance calculations. Contractors generally have higher average deposits than retailers or restaurants — but the consistency of those deposits matters more than the average amount.
| Monthly Deposits | Advance Range | Rating |
|---|---|---|
| Under $15,000 | Difficult to qualify | Low |
| $15,000–$35,000 | $11,000–$52,500 | Acceptable |
| $35,000–$75,000 | $26,000–$112,500 | Good |
| $75,000–$150,000 | $56,000–$225,000 | Strong |
| Over $150,000 | $112,000–$300,000+ | Excellent |
The gap month problem is unique to contractors. A single month where projects haven't closed out and new ones haven't started can show under $5,000 in deposits — even for a $1.5M/year business. Underwriters see this as high risk. It's the most common reason otherwise qualified contractors get declined or offered much less than expected.
| Monthly Variation Pattern | Underwriter View | Rating |
|---|---|---|
| All 3 months within ±20% of each other | Highly consistent, predictable daily payment coverage | Ideal |
| One month 40–60% below the other two | Noted — may reduce offer or ask for explanation | Flag |
| One month under $10K with others over $50K | Significant concern — offer significantly reduced | Problem |
| One month effectively zero | Often triggers decline regardless of other months | Critical |
NSFs tell underwriters your account hits zero or below — and that daily ACH payments are at risk. Contractor accounts with erratic deposits are already higher risk; NSFs compound this.
| NSFs per Month | Impact | Rating |
|---|---|---|
| 0 NSFs | Best rates and advance amounts available | Excellent |
| 1–2 NSFs | Slight rate increase; usually still qualifies | Good |
| 3–4 NSFs | Rate increases significantly; advance may be reduced | High risk |
| 5+ NSFs any month | Near-automatic decline or very unfavorable offer | Critical |
Underwriters deduct existing daily ACH payments from your available daily cash flow to calculate your debt service capacity. For contractors with erratic deposits, existing stacks create higher concern than they would for daily-revenue businesses.
| Active Positions | Impact on New Application | Rating |
|---|---|---|
| 0 | Full capacity — best advance and rate available | Best |
| 1 | Advance reduced by existing daily obligation | Acceptable |
| 2 | Significantly reduced advance; higher rate | Risky |
| 3+ | Near-automatic decline | Critical |
This is unique to contractors. Having active contracts or signed LOIs on file tells the underwriter that your revenue situation is actively improving — even if your most recent bank statement shows a gap month. Pipeline documentation can override a weak month.
| Pipeline Status | Underwriter Signal | Rating |
|---|---|---|
| 2+ active contracts or confirmed LOIs | Strong forward revenue confidence | Best |
| 1 active contract with start date | Positive signal; explains any gap month | Good |
| Pending — awaiting GC approval or permits | Acceptable if timing is near-term | Conditional |
| No contracts / prospecting only | No forward signal; advance based only on history | Weak |
| Time in Business | Notes | Rating |
|---|---|---|
| Under 6 months | Limited options; specialty starter programs only | Difficult |
| 6–12 months | Qualifies, smaller amounts, higher scrutiny of consistency | Limited |
| 1–3 years | Full qualification; underwriters comfortable with contractor pattern | Good |
| 3+ years | Best rates; seasonal/gap month patterns understood | Excellent |
Score 60+? Apply now. Have a gap month? Attach an LOE and your active contracts first.
T.A.G. Business Funding
500 FICO minimum. Bank declines OK. Revenue matters more than credit score. Most decisions in 24 hours.
500 FICO minimum · $4K–$6K+/month revenue · Funded in 1–3 days
What does a contractor need to qualify for a merchant cash advance?
The main approval factors for contractor MCA are: (1) $8,000+ average monthly revenue (gross deposits, not net profit); (2) 6+ months in business; (3) 500+ FICO score; (4) active business checking account with consistent deposit flow. Underwriters weight monthly revenue and deposit consistency more heavily than credit score for contractors, because contractor income is verifiable through bank statements even when credit is imperfect.
Does a general contractor with seasonal revenue qualify for MCA?
Yes — but seasonal revenue creates a variable factor rate. Underwriters average the 3-month rolling deposit totals and use that as the effective monthly revenue. If you do $60K in busy months and $10K in slow months, the underwriter may size the advance on $25–30K/month. Demonstrating a full 12-month deposit history helps offset seasonal volatility and can lower your rate.
Does a contractor's outstanding mechanic's lien or tax lien affect MCA approval?
A mechanic's lien against a property you filed does not affect your MCA eligibility. A tax lien against your business does not automatically disqualify you — it adds risk and typically raises the factor rate 0.05–0.12. An IRS installment agreement that is current often resolves the concern for most funders.
Can a contractor get MCA while carrying an existing business loan?
Yes — MCA funders look at "net deposits" (gross deposits minus existing daily MCA payments) to determine how much new advance you can carry. If your existing loan does not pull daily from your bank account, it is largely invisible to MCA underwriters. If you already have an MCA, a second position costs more and requires higher monthly revenue.
How fast can a contractor get approved and funded?
Most contractor approvals take 24–48 hours from complete application. Funding hits your account 1–3 business days after signing. The documents needed are minimal: one-page application, 6 consecutive months of business bank statements, and a voided business check. No tax returns, collateral, or business plan required.
