Underwriting Guide
MCA Requirements 2026: What You Actually Need to Qualify
Banks look at your credit history. MCA funders look at your bank account. This guide covers the exact underwriting criteria used by active MCA funders, including the minimums most ISOs won't publish.
Based on general industry patterns compiled and analyzed by T.A.G. Business Funding, January 2025 to June 2026. Individual funder criteria vary.
Minimum Monthly Revenue
Average gross deposits per month across your most recent consecutive BUSINESS bank statements. This is the pre-underwriting floor; $15,000+/month qualifies for stronger approval odds and larger advances.
Time in Business
Minimum time operating with an active business checking account. Most preferred applicants have 1+ years of history.
Minimum FICO Score
No hard credit inquiry before the initial decision. Credit score affects pricing (factor rate) more than approval, but 500 is where most funders draw the line.
Bank Statements Required
Your most recent consecutive complete months of BUSINESS bank statements: four required. All pages. Personal, Cash App and Chime statements are not accepted. See which statements count and which never do.
Full MCA Underwriting Criteria: Detailed Breakdown
1. Monthly Revenue (Most Important Factor)
MCA underwriters look at your average monthly gross deposits over your most recent consecutive months of statements. This number drives two things: how much you can borrow (typically 1-1.5x your monthly revenue) and whether you qualify at all.
| Average Monthly Revenue | Typical Advance Range | Status |
|---|---|---|
| Under $4,000 | Generally does not meet the pre-underwriting floor | Does Not Qualify |
| $4,000-$14,999 | $5,000-$20,000 | Limited Options |
| $15,000-$29,999 | $10,000-$50,000 | Qualifies |
| $30,000-$74,999 | $20,000-$120,000 | Strong Approval |
| $75,000-$149,999 | $50,000-$250,000 | Multiple Offers |
| $150,000+ | $100,000-$1,000,000+ | Premium Tier |
Note on Revenue Trends
Funders don't just look at averages; they look at trends. Revenue that is declining month-over-month is a red flag even if the average is strong. Flat or growing revenue is preferred. A single down month surrounded by strong months is generally acceptable.
2. Time in Business
The standard minimum is 6 months of business bank account history. This is a hard cutoff for most funders because they need to see revenue patterns, not just a snapshot. Businesses under 6 months have very limited MCA options.
- Under 6 months: Most MCAs unavailable. Revenue-based financing from specialized startup lenders may apply.
- 6-12 months: Qualifies for most MCAs but typically at lower amounts and higher factor rates.
- 12-24 months: Full range of MCA options with standard pricing.
- 2+ years: Preferred by most funders; competitive pricing and higher advance multipliers.
3. Credit Score
MCA is one of the only business financing products where a 500 FICO score is genuinely acceptable. However, credit score affects your factor rate significantly; lower scores pay higher rates.
| FICO Score Range | Typical Factor Rate | Notes |
|---|---|---|
| Below 500 | 1.45-1.60+ | Limited funders; very short terms |
| 500-579 | 1.35-1.50 | Most funders will approve with strong revenue |
| 580-639 | 1.25-1.40 | Standard approval; better pricing |
| 640-699 | 1.18-1.30 | Competitive offers available |
| 700+ | 1.10-1.25 | Best MCA rates; may also qualify for LOC alternatives |
Check your approval odds: it's free.
Scores from 500 considered · Past bank turndowns are not an automatic disqualifier · Tax liens reviewed case by case
4. Bank Account Requirements
Your business must have an active business checking account in good standing. Specific requirements:
- Account must be actively used for business transactions (deposits and expenses)
- No more than 3-5 NSF (non-sufficient funds) or returned items in the last 4 months
- Account must not have been closed or frozen in the past 12 months
- Personal accounts accepted for sole proprietors but business accounts preferred
- Savings accounts or prepaid cards do not qualify
5. Industry Restrictions
Most MCA funders will work with any legal industry, but a few categories are restricted. These are universal restrictions, not specific to any single funder:
| Industry | Status |
|---|---|
| Restaurants, bars, food service | Approved |
| Contractors, HVAC, plumbing, electrical | Approved |
| Retail, e-commerce (with business bank account) | Approved |
| Medical, dental, veterinary | Approved |
| Trucking and transportation | Approved |
| Salons, spas, beauty services | Approved |
| Auto repair | Approved |
| Cannabis/marijuana businesses | Restricted |
| Adult entertainment | Restricted |
| Firearms dealers (FFL) | Limited Funders |
| Non-profit organizations | Does Not Qualify |
| Gambling and gaming | Restricted |
6. Derogatory Factors That Don't Disqualify
Unlike bank loans, the following issues do not automatically disqualify a business from MCA approval:
- Prior bankruptcies (as long as discharged, not currently open)
- Tax liens (federal or state)
- Previous bank loan denials
- Negative personal credit
- Open judgments (case-by-case)
- No collateral
- No established business credit
7. Factors That Do Disqualify
- Active Chapter 7 or Chapter 13 bankruptcy filing
- Business open less than 6 months
- Average monthly deposits below $4,000
- Excessive NSFs in recent bank statements (5+ in 90 days)
- Restricted industry (cannabis, adult entertainment, non-profits)
- Active MCA default or balance with no payment arrangement
- Inability to provide at least 4 consecutive months of business bank statements
Not sure if you qualify? Find out for free.
T.A.G. reviews every application free of charge. Submit your info and we'll reach out with your options, or let you know exactly what's needed before we can proceed.
Check Your Eligibility
Documents Required for MCA Application
One of the main advantages of MCA over bank financing is the minimal documentation required. Here is the complete list:
Required to Submit
- Completed application: business name, address, EIN or SSN, ownership percentage, date established. If the business has multiple owners, see who has to sign when there is more than one owner.
- The four most recent complete, consecutive months of BUSINESS bank statements: all pages, PDF preferred. Personal, Cash App and Chime statements are not accepted; payment-processor statements are not substitutes for business bank statements; partial or duplicate months do not satisfy the four-statement requirement
Collected After Approval, at Signing
- Voided business check: confirms bank routing and account number for funding
- Government-issued ID: for identity verification (driver's license or passport)
Not required at any stage: Tax returns, financial statements, business plan, or collateral documentation.
How Much Can I Get?
MCA amounts are typically calculated as a multiple of your average monthly revenue:
- First-time applicant: 0.5x-1.0x average monthly revenue
- Repeat or renewal: 1.0x-2.0x average monthly revenue
- Strong revenue with long history: up to 2.5x average monthly revenue
The maximum advance amount from most funders is $500,000-$1,000,000 depending on the funder. T.A.G. can access advance amounts up to $1,000,000 for qualifying businesses.
What Happens After You Apply
The MCA application process is generally faster than traditional lending. The funding provider sets the actual timeline at each stage after reviewing your file, but the sequence is consistent:
- Your step: Submit application and bank statements
- Provider-set timeline: Underwriting review and offer generation
- Provider-set timeline: Receive offer(s) with advance amount, factor rate, and holdback percentage
- Your step: Review, sign contracts, and submit any additional documentation
- Provider-set timeline: Funds wired to business bank account
Frequently Asked Questions
Can I get an MCA if I have existing advances (stacking)?
Yes, but it depends on your current balance and payment history. Most funders will advance up to 1.5x your monthly revenue minus any existing daily or weekly MCA obligations. If you're already paying 25-30% of daily revenue to an existing advance, new funders may decline or offer a smaller amount to avoid overextension. Some funders specialize in second-position advances.
Does applying for an MCA affect my credit score?
Initial funding decisions are based primarily on your business's bank-statement cash flow, without a hard credit inquiry before the initial decision. Additional underwriting and credit checks, potentially including a hard inquiry, may occur before final funding.
What if my bank statements show seasonal dips?
Seasonal businesses are common in MCA. Funders will average your revenue across your statement window. If your industry has a known seasonal pattern (landscaping, contracting, restaurants), underwriters account for this. Applying during your strong season gives you the best offers. Some funders also specialize in seasonal business funding.
My business bank account is a personal account. Can I still apply?
Yes, if you are a sole proprietor. Some funders require a dedicated business account, but many accept personal accounts for sole proprietors if the deposits clearly reflect business revenue. Opening a business checking account before applying typically gives you access to more funders and better offers.
Ready to see if you qualify?
One application, our network of funding partners, decision made after review. No hard credit inquiry before the initial decision. No obligation.
Apply Now: Free Review →Scores from 500 considered · Past bank turndowns are not an automatic disqualifier · Tax liens reviewed case by case · No hard credit inquiry before the initial decision
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Related Resources
MCA Requirements FAQ
- What is the minimum monthly revenue to qualify for an MCA?
- Most MCA funders require at least $4,000-$6,000 in average monthly gross revenue as a pre-underwriting floor. Businesses below that generally do not qualify. Revenue between $4,000 and $14,999/month typically has limited options; $15,000+/month qualifies for stronger approval odds and larger advances. Revenue is calculated from 4 consecutive months of bank statements.
- What credit score do I need for a merchant cash advance?
- Most MCA funders accept credit scores as low as 500 FICO. Unlike bank loans, the primary approval factor is monthly revenue, not credit score. Some funders will work with scores below 500 if the business demonstrates strong, consistent cash flow.
- How long do I need to be in business to get an MCA?
- The standard minimum is 6 months in business with an active business bank account. Some funders require 1 year. Startups under 6 months typically do not qualify for traditional MCAs, though revenue-based options exist for some newer businesses.
- Can I get an MCA with a tax lien or bankruptcy?
- Yes. Tax liens and prior bankruptcies do not automatically disqualify a business from MCA approval. Underwriters primarily focus on recent revenue trends: your most recent consecutive months of bank deposits. An open bankruptcy filing (active Chapter 7 or 13) typically does disqualify, but discharged bankruptcies are generally acceptable.
- What documents do I need for an MCA application?
- Required to submit: a completed one-page application (business name, address, SSN/EIN, ownership information) plus the four most recent complete, consecutive months of BUSINESS bank statements. Personal, Cash App and Chime statements are not accepted, payment-processor statements are not substitutes for business bank statements, and partial or duplicate months do not satisfy the four-statement requirement. A voided business check and a government-issued ID are collected after approval, at signing, never required upfront. No tax returns, no financial statements, no business plan required.