Bank Statement Analysis
Bank statement analysis is the systematic review of a merchant's business bank statements — typically 3-6 months — to assess revenue trends, deposit consistency, average daily balance, NSF frequency, and existing financial obligations as the foundation of MCA underwriting.
Why This Matters
Bank statements are the primary truth source in MCA underwriting. Stated revenue can be inflated; bank deposits cannot. Analysis examines: total monthly deposits (revenue proxy), deposit count (transaction volume), average daily balance (cash buffer), minimum daily balance (low-water mark), NSF count (overdraft frequency, stress signal), recurring ACH withdrawals (existing funder identification), credit card processing deposits (card vs. ACH revenue mix), and end-of-month patterns (seasonal indicators). Modern underwriting platforms automate parsing through OCR or direct bank-feed APIs (Plaid, MX), reducing analysis time from hours to minutes.
Example
4 months of statements: avg deposits $85K/mo, deposit count 145/mo (high transaction count = retail), ADB $14K, min balance $2,400, NSFs 1 across 4 months (low stress), recurring ACH to 'Funder X $400/day' identified. Conclusion: healthy operation with one existing position; second-position deal viable at appropriate pricing.
Frequently Asked Questions
Frequently Asked Questions
How many months of bank statements do MCA funders require?
Standard: 3-4 months for deals under $50K, 6 months for $50K-$250K, 12 months for larger commercial deals. Some funders accept Plaid-connected real-time data in lieu of uploaded statements, reducing friction at the merchant cost of granting bank access.
What bank statement signals trigger MCA decline?
Multiple NSFs (5+ across 3 months indicates stress), recurring ACH to multiple existing funders without disclosure (stacking risk), declining revenue trend (3+ consecutive months of decreases), and unusually low deposit counts for stated industry (revenue inflation suspicion).