Can I Get an MCA With a Low Average Daily Balance?
You can, but a low average daily balance shrinks the offer or narrows the list of funders, because it tells them your account doesn't have much cushion to absorb a daily payment. Raising the balance a little over a couple of months often changes the outcome more than owners expect.
What does average daily balance tell a funder?
Your average daily balance is the typical amount sitting in your account on any given day. Two businesses with the same monthly deposits read very differently if one keeps a healthy balance and the other spends every dollar the day it arrives. The second account is one slow day away from a bounced payment, and funders know it.
What counts as a low balance?
There's no universal line. Funders compare the balance with your deposits and with the payment they're thinking about. An account where the balance regularly drops close to zero, or dips below it, reads as tight. An account that holds several days of payments on hand reads as comfortable.
How do you raise your average daily balance?
- Stop sweeping the business account into personal accounts on a daily basis.
- Time big purchases so they don't land right before you shop for funding.
- Deposit cash sales promptly instead of holding them.
- Keep a reserve in the account, even a modest one, and leave it there.
- Pay vendors on their due date rather than early if early payment leaves the account empty.
How do funders adjust for a low balance?
When the balance is low but deposits are strong, funders often respond with a smaller advance, a weekly rather than daily payment, or a shorter term. A consistent history of paying your bills on time helps. What hurts most is a low balance paired with negative days and returned items, since that combination looks like a business already stretched.
How does payment timing affect the balance?
Funders often size the daily payment against your balance on the lowest days of the month, not the average. If rent, payroll and a vendor bill all come out in the same week, that's when the account is thinnest. Spreading those big outflows across the month, where you can, gives the account a steadier floor. It also makes the advance itself easier to carry once it's in place, because the debit isn't landing on your leanest days. Watch transfers to savings, too. Money in a linked savings account doesn't count toward the balance on the checking account funders read.
What makes a balance tell a good story?
A funder reading your statements wants to see that the account recovers after big bills instead of staying near zero for days. A pattern of steady recovery is often as helpful as a higher average.
How can Afterfirst help with this?
Call 877-FUND-654 and send your recent statements. We'll look at your balance pattern the way a funder does and tell you whether to shop the file now or build the balance for a month or two first. Either way, you'll know what the funders are going to see.
What else do owners ask about this?
- Do funders look at profit or revenue for an MCA?
- Do cash deposits count toward an MCA?
- Can a cannabis business get a merchant cash advance?
More short answers on this topic are on the your business and your file 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.