What's the Difference Between an MCA Approval and an Offer?
An approval means a funder has read your file and is willing to fund within a range, usually with conditions. An offer spells out the exact amount, the purchased amount, the payment, the fees and the funder's name, and it's what you actually accept and sign.
What does an MCA approval include?
An approval is the funder saying yes in principle. It often comes as a short message or email with a funding amount, a factor rate and a list of conditions. Those conditions are called stips, short for stipulations. They're the documents or checks the funder still needs before it will fund, like a voided check, proof of ownership or a landlord call.
What does an offer add to an approval?
A full offer, or the contract that follows it, fills in every detail. The purchase price you receive, the purchased amount you'll deliver, the specified percentage or fixed payment, how often the payment comes out, each fee and the net amount you'll see in your account. It names the funder as the purchaser. That's the document you compare, because everything that affects your cash flow is on it.
Why do approvals change before funding?
An approval is based on what the funder has seen so far. If the stips turn up something new, like a lower balance in a newer statement, an undisclosed advance or a lien, the funder adjusts the amount or the terms. That isn't a trick. It's why we check what we can before your file goes out, so an approval holds up at the offer stage.
What if you get several approvals at once?
When we shop your file, you often get more than one approval. We line them up and tell you which ones look strongest once fees and payment are considered. Then we move the one you choose to a full contract. You're under no obligation to accept any approval.
What should you ask about an approval?
- Is this amount before or after fees?
- What's the daily or weekly payment?
- What stips are still open, and how long will they take?
- Does the approval expire, and when does the funder need everything?
- Is there an early payoff discount?
When is an offer complete enough to sign?
Never sign a contract with blanks or with numbers that differ from what you were told. If anything on the contract doesn't match the approval, stop and call us. Fixing it before you sign takes minutes. Fixing it after takes a lot longer.
How long does an MCA approval last?
Approvals are based on a snapshot of your account, so funders set a window, often a matter of days, for closing. If it runs out, the funder asks for fresh statements and reprices from there.
How can Afterfirst help with this?
If you have an approval and aren't sure what's missing, send it to info@afterfirstmca.com or call 877-FUND-654. We'll tell you what the full offer will look like and which stips to gather so the approval turns into funding without surprises.
What else do owners ask about this?
- Can I get an MCA quote before I send bank statements?
- Can I ask for a smaller amount than I was approved for?
- Does an MCA contract need to be notarized?
More short answers on this topic are on the offers and contracts FAQ, and the MCA offer comparison runs the numbers for your own file.
Have a question we didn't answer?
Ask us on the call. 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.