Time in Business: Meaning in a Merchant Cash Advance
Time in business is how long a company has been operating, usually counted in months from when it started taking revenue or from its registration. It is one of the first rules in almost every funder's credit box.
What does time in business mean?
Funders want enough history to judge how the business performs through ups and downs. They check it through your registration records, the age of your bank account, your tax ID and sometimes your business license. The starting point they accept matters: a company that registered long ago but only opened its business account recently gets judged on the account history.
Why does time in business matter to your business?
Most merchant cash advance programs set a minimum number of months, and the youngest businesses have the fewest options and the highest prices. Past a certain point, longer history mostly helps pricing and size rather than approval. If you bought an existing business, the prior owner's history sometimes counts, if the bank account and tax ID carried over.
How do you prove time in business?
- Keep your registration papers and tax ID letter handy.
- Use the same business bank account over time rather than switching often.
- If you changed entity type, be ready to show that it's the same business.
What if you're too new?
A short history isn't the end of the road, but the options change. Newer businesses often do better with a small first advance and a renewal once they have more statements.
Where will you see it?
In the application, as the start date. In funder decline reasons. In the documents funders ask for as proof, like articles of organization or an older tax return.
Which terms are related to time in business?
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.