MCA Underwriting

If you’ve been in the merchant cash advance space for any length of time, you already know — underwriting is a moving target. What looks like a great deal on paper can go sideways fast if you miss a few key signs.

The thing is, many of the biggest underwriting mistakes aren’t wild blunders. They’re small, easy-to-miss issues that slowly eat away at your portfolio’s performance.

Let’s talk about some of those missteps—so you can spot them early, and avoid headaches down the road.

1. Basing the Decision on Revenue Alone

Sure, monthly deposits look solid—but what’s really happening under the hood? A merchant might be showing $60K a month in revenue, but if that’s tied to one client or one-off events, that deal might be shakier than it looks.

Reality check:

Revenue matters, but cash flow consistency and expense structure matter just as much. Don’t skip that deeper look.

2. Skipping Over NSF and Overdraft Patterns

We’ve all been there. You’re flying through files, trying to hit a response time that keeps you in the game. It’s tempting to focus on deposits and just glance at the rest.

But here’s the thing:

A merchant who’s constantly in overdraft or bouncing payments isn’t ready for another advance—no matter how much cash they’re pulling in.

3. Missing Hidden Stacks

This is a big one.

A merchant might claim they’re stack-free, but their bank statement tells another story. Regular ACH debits at odd amounts? That’s probably a competing lender.

Tip:

Look for clues—not everything gets disclosed upfront. If something feels off, ask for payoff letters or dig deeper into statement patterns.

4. Letting Software Do All the Thinking

Yeah, automated tools are great. They help speed things up and pull clean data. But relying on software alone? That’s risky.

There’s a big difference between parsing numbers and understanding business behavior. A trained human eye will always catch things that software misses—like altered PDFs or irregular payment flow.

5. Not Tailoring the Offer to the Merchant

Not every business can handle a high holdback or short term. But sometimes, funders get into a one-size-fits-all mindset.

If you give a restaurant with thin margins a 30% holdback, they’re going to struggle. And when they struggle, you get hit with defaults or broken contracts.

Bottom line:

Structure deals around repayment ability, not just maximum funding amount.

6. Overlooking the Business’s Actual Nature

You’d be surprised how many files get through underwriting without confirming what the merchant actually does. Is their business seasonal? Do they rely on a few big clients? Is their online presence even real?

These things matter. And they’re easy to check—Google the business, verify state registrations, or even check their social profiles. Five minutes of research could save you thousands.

So, What’s the Fix?

Truthfully, there’s no silver bullet. But the best funders and brokers take a blended approach—they move fast, but they don’t skip steps. They use automation, but they don’t hand over judgment to software.

Most importantly, they build a workflow that includes trained underwriting support, so small issues don’t slip through.

Want Help Catching the Details?

At Procizo, we work with MCA brokers and funders who want to clean up their process without slowing it down. From bank statement reviews to spotting stack indicators, we help you make decisions with confidence—not guesswork.

Let’s talk.

👉 Visit procizo.com to see how we can support your underwriting flow.