Conditional Approval: Meaning in a Merchant Cash Advance
A conditional approval is a funder's yes that depends on clearing listed conditions before money goes out. Typical conditions are more documents, a verification call, a payoff of another advance or confirmation that nothing changed in the account.
What does conditional approval mean?
An underwriter reviewed the file and likes it, but hasn't finished. The approval names an amount range, a factor rate and a payment, then lists what still has to happen. If a condition turns up something new, like a fresh advance on the statement or a drop in deposits, the terms can change or the approval can fall away.
Why does conditional approval matter to your business?
It's easy to treat a conditional approval as money in the bank. It isn't yet. Avoid taking on another advance or making big commitments until the funds land. And read the conditions closely: an approval that depends on paying off another funder changes the net cash you actually receive.
What conditions come with an approval?
- Month-to-date bank activity.
- A verification call with each owner.
- A payoff letter from an existing funder.
- Proof of ownership and ID.
How do you move it to funded?
Clear the conditions quickly and don't change anything material in the account meanwhile. If something did change, tell your broker right away rather than letting the funder find it.
How long does a conditional approval hold?
Most conditional approvals are good for a short window, often a week or two. After that, the funder wants fresh statements and reruns the numbers, which can change the offer in either direction.
Where will you see it?
In an approval email or offer summary, often with a list of stips. From your broker, who explains which conditions matter most. In the funder's portal, where each condition shows as open or cleared.
Which terms are related to conditional approval?
- Stipulations
- Verification call
- What's the difference between an MCA approval and an offer?
- Net funding
- Payoff letter
The full list is in the glossary. Owners ask about this in Do funders look at profit or revenue for an MCA?.
A term on your offer you don't recognize?
Send us the line and we'll tell you what it means. Call 877-FUND-654 with any question. We call you back, usually the same business day, and we always talk with you before we shop your file.