Do All Owners Have to Sign a Merchant Cash Advance?
Not always. Most funders want every owner with a large share of the business to sign, while a minority partner with a small stake is often left off the personal guarantee.
Which two signatures does a funder ask for?
It helps to separate the two things owners sign. The first is the contract itself, signed on behalf of the business by someone with authority to bind it. The second is the personal guarantee, which is a promise by an owner personally that the business will keep the performance terms in the contract. One owner with authority can usually sign for the business. The guarantee is where funders ask for more names, because they want the people who control the business to stand behind it.
Which owners do funders want to sign?
- Majority owners sign both the contract and the guarantee.
- Owners with a meaningful minority share are often asked to guarantee too. The cutoff differs by funder.
- Silent partners with a small stake are usually left off, but the funder still wants to know they exist.
- Spouses who aren't owners don't sign in most cases, though a few states and a few funders have their own rules around community property.
What if a partner won't sign?
This comes up more than you'd think. One partner wants the capital and the other doesn't want a personal guarantee. Tell us early. Some funders will work with the signing partner alone if that person holds enough of the business, and some won't. It's better to know which funders are open to it before your file goes out than to find out at the contract stage. Never sign for a partner or list someone as an owner who isn't one. The verification call confirms ownership, and a mismatch ends the deal.
Why do funders care about every owner?
A funder is taking a risk on the whole business, not just the person on the phone. If one partner signs and another partner later disputes the deal, closes the account or moves the sales elsewhere, the funder has a mess on its hands. Asking every significant owner to sign keeps everyone on the same page from day one. It also protects the partners from each other. When everyone signs, nobody can take on a large obligation for the business without the others knowing about it. If your operating agreement requires consent from all members for new financing, follow it. Funders read those agreements on larger deals, and an agreement that says one thing while the signatures say another is a problem.
How can Afterfirst help with this?
Call 877-FUND-654 with your ownership breakdown: who owns what share and who is willing to sign. We'll match your file to funders whose signing rules fit your setup, and we'll tell you before anything goes out if a partner's signature is going to be required.
What else do owners ask about this?
- Does my spouse have to sign the personal guarantee on an MCA?
- What does a funder ask on the verification call?
- Can I get an MCA for a business I just bought?
More short answers on this topic are on the applying FAQ, and the funder fit checker 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.