How Long Do I Need to Be in Business for an MCA?
Many funders want at least several months of deposits in a business bank account, and more options open up after a year. Time in business matters because funders size and price the offer off history. A younger business can still get funded if deposits are steady, but expect a smaller amount and a higher cost. Tell funders the real month you opened.
How does time in business change the offer?
| Time in business | What usually happens |
|---|---|
| Under a few months | Most funders pass |
| Several months | Some funders, smaller offers |
| About a year | More funders and better terms |
| Several years | The widest choice |
Say two shops each deposit $30,000 a month. One opened four months ago, the other three years ago. The older shop's offer is usually larger, longer and cheaper, because the funder can see how it handled slow months.
Does a business you bought keep its earlier history?
It can. When you bought a running business and kept its bank account and processor, funders read the deposit history from before the sale. A new entity with a new account starts the clock over, so keep the seller's statements on hand.
What should you do while you build history?
Run every sale through one business account and avoid overdrafts. See MCA for a new business for other options.
What does this look like with real numbers?
A shop open eight months with steady deposits of $35,000 a month usually sees a smaller first offer, often a fraction of a month's deposits, with a shorter term. The same shop at eighteen months, with the same deposits, usually sees a larger amount and more funders willing to look. If you're close to a milestone like a year in business, waiting a few weeks can open more offers. Read MCAs for new businesses.
What should you ask the funder?
- What's your minimum time in business?
- Do you count from the bank account or the registration?
- How does history change the factor?
- What amount would you consider now?
Where can you check your own numbers?
The short version is in the Qualifying FAQ. To check the numbers on your own advance, use the funder fit checker.
Want a second look at your advance?
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.