Can a New Business Get a Merchant Cash Advance?
If your business is young, you have probably wondered whether a merchant cash advance is even possible yet. The honest answer is that it depends on the funder and on what your bank statements show. Some funders are willing to look at businesses with a short history. Others want to see a longer record. This guide explains how time in business fits into the picture, what newer businesses can do to present a clear file, and what to do if you are not quite there yet.
Forward Funders arranges merchant cash advance options from $25K to $5M for businesses in all 50 states. Every funder sets its own requirements, so this is a guide to what funders commonly weigh, not a promise about any single file.
Why funders ask about time in business
An advance is repaid from your future receivables, so a funder wants evidence that those receivables exist and arrive regularly. A longer history gives more evidence. A short one gives less, which is why many funders ask for a minimum period of operation. That minimum is not the same everywhere. Some funders are comfortable with a few months of activity, while others prefer a year or more.
Time in business is only one input. A funder also reviews your deposits, balances, recent bank statements, industry and the details in your application. Credit is one factor each funder reviews, not the whole story. If you want a closer look at the statement side, see what funders look for in business bank statements.
What matters for a newer business
| What funders look at | Why it matters for a newer business | How you can prepare |
|---|---|---|
| Time in business | Gives a sense of whether the business has an operating record | Know your start date and have formation documents handy |
| Bank statements | They show real deposits even when the history is short | Run all sales through the business account, not a personal one |
| Deposit consistency | Steady deposits matter more when there are only a few months to look at | Be ready to explain any big swings in a sentence or two |
| Balances | Shows whether the account holds a cushion | Avoid running the account close to empty in the weeks before you apply |
| Existing obligations | Any financing already in place changes the picture | List every advance and loan on your application |
| Industry and use of funds | Different industries have different patterns | Be ready to say what the money is for |
Because there is less history to review, each month on your statements carries more weight. That is good news if your recent months are strong, and a reason to be tidy about the details.
Use a business account for business money
This one habit makes more difference than almost anything else for newer businesses. If customers pay into a personal account, or you move money between personal and business accounts regularly, your business history is harder to read. A funder looking at statements wants to see customer payments arriving in a business account. Funders also tend to set aside transfers between your own accounts, so they would not count as revenue anyway. A dedicated business account that has been in use for a few months gives you a cleaner file than a longer history that is mixed up.
How your type of business changes the picture
A newer business does not look the same everywhere, and funders know that:
- A new restaurant or salon often shows daily card deposits very quickly, so a pattern can emerge in a short time.
- A new construction company may be paid in a few large invoice payments, which can look lumpy early on.
- A new e-commerce business may show payouts from platforms on those platforms' schedules.
- A new franchise location is a new business in its own right, even if the brand is established.
None of these is better or worse. What helps is being able to describe your pattern in a sentence or two.
How to present a short history clearly
- Know your start date. Be precise about when you began operating and when the business account was opened.
- Keep the statements clean. Fewer unusual deposits and fewer returned items make the months you have easier to read.
- Explain, do not hide. If one month was slow because you opened midmonth or a customer paid late, say so.
- Be clear about the purpose. A specific use of funds, such as equipment, inventory or a hire that adds capacity, is easier to evaluate than a general request.
- Do not over-request. Asking for an amount that fits your deposits makes more sense than asking for the maximum.
What if you are not there yet?
If you have only a short record, or none that a funder can use, you have a few options:
- Wait and build. Another few months of steady deposits can change the picture. Keep your statements organized in the meantime.
- Look at the calendar. If your business is seasonal, a strong season on the statements helps. See working capital for seasonal businesses.
- Think about the right product. An advance is not the only option, and for some businesses another product fits better. See merchant cash advance vs business loan.
- Ask. Different funders have different requirements, and a conversation will tell you where you stand.
What to expect from the process
Preparation for a newer business is the same as for any other. You need a completed Funding Application, your last four months of business bank statements, and month-to-date activity if it is after the 10th of the month. If you have been operating for fewer months than that, send the statements you have, and we will let you know if anything else is needed for your file. Our application preparation checklist lists each item, and how long business funding takes explains the typical timeline. Once a funder approves, funding typically happens within 24 to 48 hours. That is not a promise, and timing depends on the funder and how complete your file is.
Funders review each application on its own merits, and submitting an application does not ensure an offer. If you want to understand the product first, our guide to what a merchant cash advance is is a good starting point.
Where we work
We help businesses in every state; see States We Serve for coverage, or browse the real estate investors, cleaning services and daycare pages to see how funders look at different industries. When you are ready, start on our apply page.
Frequently asked questions
How long do I need to be in business to get a merchant cash advance?
It varies by funder. Some consider businesses with only a few months of activity, and others prefer a year or more. Funders also weigh deposits, balances and your recent bank statements.
Can a startup get a merchant cash advance?
Some funders will look at newer businesses that have a record of deposits in a business bank account. Each funder sets its own requirements, and submitting an application does not ensure an offer.
Does my personal credit matter for a newer business?
Credit is one factor each funder reviews. Funders also look at your deposits, balances, time in business and recent bank statements, so credit is not the whole story.
What if I have fewer than four months of bank statements?
Send the statements you have with your completed Funding Application, and we will let you know if anything else is needed for your file.
Should I mix personal and business funds in one account?
It is better to run business income through a business account. Mixed accounts make your history harder to read, and transfers between your own accounts are usually set aside in a review.
Ready to start? Call (718) 619-9867, Monday through Saturday, 8am to 8pm, or begin online.
Start Your Funding Application
Funders make the decisions and provide the written agreements. Availability, amounts and timing depend on the funder and your business information, and submitting an application does not ensure an offer.