MCA underwriting evaluates whether a proposed advance fits a business's sales activity, cash flow, and existing obligations. A complete application helps the team review the facts; it does not guarantee an approval. For ISOs, the most useful preparation is an accurate file with a clear explanation of the merchant's funding need.
Logic Advance Starting Requirements
Our published screening guidelines start with at least six months in business, $25,000 in monthly revenue, and a 500+ credit score for MCA review. These are starting criteria rather than an offer. Product-specific requirements, business location, industry, existing financing, and other underwriting findings can affect eligibility.
Prepare the four most recent complete business bank statements and a signed application. Have a valid government-issued ID and business account verification available when requested. Check the current broker submission guidelines before submitting; underwriting can request additional documents.
What Underwriters Review
Revenue and Cash Flow
Review both the level and pattern of deposits. A monthly average alone can hide a weak recent month, seasonal concentration, or frequent low balances. Identify transfers between accounts, prior financing deposits, and unusual credits so they are not mistaken for recurring customer revenue. The underwriting team determines how revenue is verified.
For illustration, four months of business revenue totaling $120,000 averages $30,000 per month. That average exceeds the stated $25,000 starting threshold, but it says nothing by itself about available cash after payroll, rent, taxes, existing financing, and other expenses.
Operating History and Business Identity
The application should consistently identify the legal entity, business name, owners, location, and operating history. Explain a recent name change, bank-account change, or ownership transition rather than leaving the reviewer to reconcile conflicting records.
Credit and Existing Obligations
Credit is one part of the review. A score at or above the minimum does not override other concerns. List current advances, funding, payment schedules, balances, and any other obligations requested. A proposed additional position must be reviewed in the context of the business's overall payment burden.
Industry, Seasonality and Use of Funds
Describe what the business sells, when it collects revenue, and how the proposed funds will be used. If sales are seasonal, provide context and supporting records. Avoid presenting future contracts or projections as already collected revenue.
Daily Balances, Card Sales and Chargebacks
Ending daily balances show how much cash remains between deposits and expenses. Frequent near-zero or negative days can prompt additional questions even when monthly revenue looks sufficient. Where card sales matter to the file, processing statements can help explain deposits, refunds, and disputed transactions. Chargebacks can reduce expected receipts; provide context for unusual patterns.
Ratios and Paper Grades Are Provider-Specific
A payment-to-revenue calculation compares obligations with business revenue for the same period. For example, $6,000 in monthly payments divided by $30,000 in monthly revenue is 20%. That is an illustrative calculation, not an approval threshold or a substitute for reviewing operating expenses. Ask which income measure a provider means if it uses the label debt-to-income.
A debt-to-asset ratio compares debt with assets, but the definitions and relevance depend on the review. Do not substitute equipment value for available operating cash. Some providers label risk tiers A, B, C, or D; these labels are not a universal MCA standard, and Logic Advance does not publish a grade table here. Avoid assigning a merchant a grade based on another funder's thresholds.
The Review Process, Step by Step
- Intake: Confirm the application, authorization, and required statements are complete.
- Verification: Review business identity, account information, revenue, and existing financing.
- Underwriting: Assess risk and determine whether an offer can be made.
- Offer review: Explain net proceeds, total remittance, costs, payment arrangements, and conditions.
- Closing: Complete requested verification and documents. Funding depends on final approval and processing.
Common Red Flags and How to Address Them
- Declining deposits: Explain the cause with supporting facts; do not omit the weaker month.
- Frequent overdrafts or NSFs: Identify the pattern and discuss it honestly. There is no universal acceptable count.
- Undisclosed financing: Supply accurate balances and payment details. Never remove transactions from statements.
- Missing or inconsistent records: Request complete, readable originals and resolve mismatched business details.
- Bankruptcy, liens, or legal issues: Disclose requested information and ask the team whether the file is eligible for review.
Explain the Offer Before the Merchant Signs
A factor rate is not an annual percentage rate. An illustrative $50,000 advance at a 1.30 factor produces $65,000 in contracted remittance before other fees or adjustments. Actual net proceeds, timing, payment structure, and required cost disclosures determine how to compare an offer. This example is not a Logic Advance quote.
Confirm whether collection uses a sales split or scheduled debits, how any reconciliation procedure works, and whether the agreement includes liens or guarantees. Do not promise that scheduled debits automatically decline with sales. The FTC's guidance for small-business financing providers emphasizes accurate representations of funding amounts and security obligations.
Write a Useful Deal Note
Summarize the business, requested amount, intended use, operating history, revenue pattern, existing obligations, and any issue the reviewer should understand. Keep the note factual and brief. Submit supporting financial documents through the approved channel rather than putting sensitive details into general contact messages.
Explore merchant cash advance information or ask our team about a submission.
Read Your Own File the Way an Underwriter Will
An underwriter answers one question: can this business support the proposed advance alongside everything it already owes? Read your own file that way before it goes out. Four months of revenue totaling $120,000 averages $30,000 a month, above the $25,000 starting threshold, yet the average alone settles nothing. What carries the review is the pattern underneath it: steady deposits arriving through the month, transfers labeled for what they are, existing obligations declared up front, and balances that still stand after payroll, rent, and taxes have all taken their full share of it.
Then run the payment test with this page's own math. Monthly payments of $6,000 against $30,000 of revenue equal 20 percent, an illustration of burden rather than an approval line, because operating expenses come out of the same revenue. List every current advance with its balance and payment schedule, explain the weakest month instead of leaving it out, and reconcile the business name, owners, and account details so the reviewer never has to guess which record is right.
If a bank reduced your business to one score, or a broker went quiet when the questions got specific, that search ends here. Logic Advance is growing fast and invests in the partner resources behind every review, so files get read whole and answered honestly. Picture the decision made on your real business: the deposits, the obligations, and the plan, all on the table. You found the review your file deserved, finally.
Label Every Unusual Deposit Before the Review Starts
Underwriters do not count money moving between your own accounts as customer revenue, and an unlabeled transfer can quietly shrink the revenue your file gets credit for. This page is direct about how the review works: deposits are checked for transfers between accounts and earlier funding deposits so they are not mistaken for recurring customer revenue, and unusual credits are identified for what they are. Label each one before the file goes out, in your accounting notes and in the deal note, and the reviewer spends the review on your real sales pattern instead of on detective work.
The habit changes real numbers. Four months of revenue totaling $120,000 averages $30,000 a month, above the $25,000 starting threshold on this page, but that average only holds if the deposits underneath it read as revenue. A transfer left unexplained invites the reviewer to set it aside; a transfer labeled with its source and reason can be set aside cleanly, without casting doubt on the deposits around it. Then the rest of the file speaks at full strength: the payment test on this page, $6,000 of monthly payments against $30,000 of revenue equals 20 percent, the starting requirements of six months in business, $25,000 in monthly revenue, and a 500 or higher credit score, and four complete statements that match the application. Logic Advance is growing fast and invests in the partner resources behind every review. If a bank reduced your business to one score, or a broker went quiet when the questions got specific, that search ends here: label the unusual, explain the weakest month, and let the decision be made on your real business, finally.
Frequently Asked Questions
What happens after funding?
Keep the agreement, servicing contact, and payment instructions accessible. Servicing may review payment activity and request updated information as permitted by the agreement. Contact the designated team promptly about a payment issue or material sales change; follow the stated process for any reconciliation request.
How many bank statements should I prepare?
Prepare four recent, complete business bank statements with the signed application. Include all pages and readable, unaltered documents. Additional verification may be requested.
Does meeting the minimum revenue guarantee approval?
No. The $25,000 monthly revenue minimum is a starting requirement. Cash flow, operating history, credit, existing obligations, and other underwriting findings also affect the decision.
Can a business with existing advances apply?
Disclose each current obligation and payment schedule. Additional financing depends on program rules and the overall underwriting review; multiple positions do not guarantee eligibility.
How long does underwriting take?
Timing depends on file completeness, verification, complexity, and the financing program. Ask your contact for the next required action and expected review timing rather than promising a fixed approval deadline.
What should I do after a decline or document request?
Ask what can be clarified or corrected, provide genuine supporting records, and confirm whether reconsideration is appropriate. Do not alter bank statements or omit existing obligations to change the outcome.
Is a factor rate the same as APR?
No. A factor rate multiplies the advance to calculate a contracted remittance amount. APR accounts for annualized cost and timing under the applicable calculation method. Review the actual offer and required disclosures.
What is the first thing an underwriter checks on a new file?
Completeness and consistency come first: a signed application, four recent complete business bank statements, and business details that match across every record. A file that reconciles cleanly lets the reviewer move straight to revenue, balances, and existing obligations instead of spending the review resolving mismatched names or missing pages.
Does one strong month make up for a weak month in my statements?
No. Reviewers read the pattern across all four months, not only the average. A weak month with an honest explanation and supporting records reads far better than a strong average with an unexplained dip, because the dip will be found either way and an unexplained one raises harder questions.
How are transfers between my own accounts treated in a review?
Transfers are identified so they are not mistaken for recurring customer revenue. Label them clearly in your deal note, along with any funding deposits or other unusual credits, so the revenue figure the reviewer builds reflects money the business actually earned from customers.
What does a payment-to-revenue percentage actually tell the reviewer?
It compares the proposed payments with revenue for the same period, so the reviewer can judge the burden alongside payroll, rent, taxes, and existing obligations. It is one calculation inside a full review, not a published approval threshold, and it never substitutes for reading the operating expenses behind the revenue.
Can I leave a nearly paid-off advance off my application?
No. Disclose every current advance and funding obligation with its balance and payment schedule, including one close to payoff. Undisclosed financing found during verification damages the file far more than the obligation itself would have, and the proposed advance must be reviewed against the business's full payment burden.
What should I do if my statements show frequent low-balance days?
Explain the pattern honestly rather than hoping it goes unnoticed. Show how deposit timing lines up with payroll, rent, and supplier payments, and provide the context or supporting records the reviewer requests. Frequent near-zero days prompt questions, but a business that explains its cash rhythm gives the reviewer something solid to work with.
Should I send a note explaining unusual deposits with my statements?
Yes. This page asks preparers to identify transfers between accounts, earlier funding deposits, and unusual credits so they are not mistaken for recurring customer revenue. A short note that names each unusual deposit, its source, and its date lets the reviewer set it aside cleanly and judge the file on your real sales pattern instead of guessing at your statements.
What counts as an unusual deposit in a review?
Anything that is not a normal customer payment arriving in the usual pattern: a transfer from another of your accounts, an owner's contribution, proceeds from earlier funding, a one-time credit, or a deposit far larger than your typical receipts. None of these is automatically a problem. Each becomes a question only when the file leaves the reviewer to work out what it was.
How are one-time credits treated differently from customer revenue?
Customer revenue repeats; a one-time credit does not, and underwriting sizes an advance against what the business can support over time. This page notes that a monthly average alone can hide what sits underneath it. Label one-time credits for what they are, and the reviewer can weigh your recurring deposits, the number the proposed payment will actually be tested against.
What if my business changed bank accounts recently?
Explain it rather than leaving the reviewer to reconcile conflicting records. This page lists a recent bank-account change among the identity details an application should address directly. State when the account changed and why, make sure the business name and ownership details match across the application and the statements, and be ready to provide statements from both accounts if the team asks.
Can seasonal revenue hurt my review if I do not explain it?
It can, because unexplained seasonality reads as decline. This page advises describing what the business sells, when it collects revenue, and providing context and supporting records when sales are seasonal. A slow month with a named cause, next to the strong months that surround it, is a pattern a reviewer can underwrite; the same month left silent is a question mark.
What should my deal note say about my weakest month?
Say what happened, with facts. This page's deal note guidance is to summarize the business, the requested amount, the intended use, the revenue pattern, and any issue the reviewer should understand, keeping it factual and brief. For the weakest month, name the cause, show whether deposits recovered after it, and point to the records that support the explanation instead of omitting the month and hoping it passes unnoticed.
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