What Merchant Cash Advance Underwriting Taught Me About Saying No

For me, the decision to decline comes well before any conversation about price.

Merchant cash advance underwriting is mostly exclusion, not pricing.

I buy participations in advances that are already remitting. A file can look strong and still fail before I ever get to terms. What disqualifies it is capacity, and I read that from how the merchant is actually paying.

The first thing I look at is missed or broken remittances. A payment record that's already slipping is the answer. I don't need to look further.

Then I read the bank statements. Negative ending balances and frequent negative days tell me whether the cash flow can carry the schedule it's already on. If it can't, nothing else about the file matters to me.

The last thing is revenue that swings with no explanation. Inconsistency reads forward. What's erratic now tends to stay erratic.

The order is the point. I read capacity off the tape first, and a file that fails an early test never reaches pricing. Saying no early isn't caution to me. It's the part of the work that protects the capital I do deploy.