The Business Owners Banks Said No To

Maria sat across the desk from her third bank loan officer in two months, watching the familiar expression of polite rejection form on his face as he reviewed her file. Her food truck generated $28,000 monthly with healthy profit margins, she'd been operating for nine months, and she needed $20,000 for kitchen equipment upgrades. Everything about her business screamed "viable operation."

Except her credit score: 615. And her time in business: nine months instead of the required two years. And her lack of collateral: the food truck was leased, not owned.

"I'm sorry," the loan officer said, closing her file. "You just don't meet our minimum criteria."

Two days later, Maria applied for a merchant cash advance. The application asked different questions: What's your monthly processing volume? Do you have six months of bank statements? Are you generating revenue?

Twenty-six hours after applying, she had approval for $25,000. Same business, same financials, completely different verdict. The MCA provider didn't care about her 615 credit score, her nine-month operating history, or her lack of collateral. They cared about one thing: her processing statements showing $28,000 flowing through her business monthly.

This is who's eligible for merchant financing—the businesses traditional lenders systematically exclude despite their viability.

The Basic Eligibility Checklist

Merchant cash advance providers have surprisingly accessible requirements compared to traditional lenders:

Time in Business: Most require just 6-12 months of operations. Some work with businesses as young as three months if revenue is strong. Maria's nine months easily cleared this bar, while banks wanted twenty-four months minimum.

Monthly Revenue or Processing Volume: Typically $10,000-$15,000 monthly in credit card processing or total revenue. This isn't cumulative lifetime revenue, it's current monthly flow proving you're an active, functioning business generating consistent income.

Credit Score: Generally 500-550 minimum, though some providers work with scores as low as 450 for exceptional cash flow. Scores in the 600-650 range are completely acceptable. Maria's 615, which disqualified her from bank loans, was comfortably above MCA thresholds.

Business Bank Account: You need an active business checking account showing regular deposits. This proves legitimacy and provides the account for funding and, if applicable, ACH payment withdrawals.

Legal Business Entity: You need to be a registered business, LLC, corporation, sole proprietorship with DBA, or partnership. Informal cash businesses operating without registration don't qualify.

US-Based Operations: Most MCA providers only work with businesses operating in the United States with US bank accounts, though some work with Canadian businesses.

That's essentially it. No collateral requirements, no extensive financial statement analysis, no business plans, no detailed projections. If you meet these basic criteria, you're likely eligible regardless of factors that disqualify you from traditional financing.

Who Gets Approved Most Easily?

Certain business profiles sail through MCA approval:

High-Volume Credit Card Processors: Restaurants, retailers, salons, and other businesses processing $30,000+ monthly in credit cards are MCA provider favorites. Your card processing directly funds repayment through automatic withholding, making you low-risk from their perspective.

Established Seasonal Operations: A Christmas tree farm generating $380,000 from November-December or a landscaping company making $340,000 from April-October might show inconsistent monthly revenue that scares banks, but MCA providers understand seasonal patterns and approve based on peak-season capacity.

Service Businesses with Consistent Revenue: HVAC companies, plumbers, electricians, auto repair shops, businesses with steady customer flow generating predictable weekly revenue qualify easily even without massive processing volumes.

Businesses with Imperfect Credit: Owners with 580-680 credit scores who've been rebuilding after divorces, medical emergencies, or past business challenges get approved based on current cash flow rather than past credit mistakes.

Minority and Women-Owned Businesses: These demographics face statistical disadvantages in traditional lending but find MCA providers care only about revenue, not demographics. If your processing volume is strong, you're viable regardless of who you are.

Who Faces Challenges

Some business types struggle even with MCA providers:

Brand New Startups: Under three months of operations with minimal processing history have trouble proving sustainability. Most providers want at least six months showing you're not a flash-in-the-pan operation that will disappear next month.

Businesses with Multiple Existing MCAs: If bank statements show you're already servicing two or three MCAs consuming 30-40% of revenue, adding a fourth becomes mathematically impossible. Providers decline because there's simply no cash flow capacity left.

Declining Revenue Businesses: If your processing volume is dropping month-over-month, $40,000 in January, $32,000 in February, $25,000 in March, providers worry you're circling the drain. MCAs work for stable or growing businesses, not dying ones.

Very Low Volume Operations: Processing under $8,000-$10,000 monthly means there's simply not enough revenue to support meaningful advances with reasonable holdback percentages. You might get approved, but only for $5,000-$7,000, which may not solve your capital needs.

Cash-Heavy Businesses: Operations with minimal credit card processing, cash-based retailers, service businesses preferring checks, B2B operations with invoice payment, need revenue-based MCAs tied to total deposits rather than card processing specifically. These are available but slightly less common.

The Credit Score Reality

Let's be specific about credit requirements because this is where merchant financing diverges most dramatically from traditional lending:

Below 500: Serious challenges. Recent bankruptcy, active collections, multiple charge-offs signal chaos that even flexible MCA providers hesitate about. Approval possible only with exceptional processing volume.

500-580: Generally acceptable with strong revenue. Maria's friend Roberto has a 545 score from a 2019 bankruptcy but processes $35,000 monthly through his auto repair shop. He was approved for $30,000 because his processing volume proved current business health despite past personal credit disasters.

580-650: Sweet spot for MCAs. Banks reject you, MCA providers approve you. You're clearly rebuilding credit (proving responsibility) while generating revenue (proving viability). Maria fit here perfectly.

Above 650: Excellent territory. You might qualify for some traditional financing at lower rates, but if you need speed or have other barriers (short operating history, seasonal revenue), MCAs remain accessible and the credit score might help negotiate slightly better terms.

Industry Considerations

Certain industries find MCA eligibility easier:

Food Service: Restaurants, cafes, food trucks, catering, all process heavy credit card volumes and get approved easily despite the industry's high failure rates.

Retail: Brick-and-mortar retail from clothing boutiques to electronics shops to specialty stores qualify readily due to consistent card processing.

Personal Services: Hair salons, nail salons, spas, barbershops, massage therapy, high card processing volumes from daily customer flow make approval straightforward

Healthcare: Medical practices, dental offices, chiropractors, physical therapists increasingly accept cards for patient payments, creating MCA eligibility.

Professional Services: Attorneys, accountants, consultants who accept card payments for retainers or services qualify, though they may have lower processing volumes than retail operations.

The Bottom Line on Eligibility

The profound difference between traditional lending and merchant financing eligibility comes down to this: banks ask "Have you proven yourself worthy over years of perfect financial behavior?" while MCA providers ask "Is money flowing through your business right now?"

Maria's food truck was viable, profitable, and growing. Banks didn't care because she failed arbitrary thresholds, credit score, time in business, collateral availability. The MCA provider approved her in 26 hours because money was clearly flowing through her business at volumes capable of servicing their holdback percentage.

If you're generating $15,000+ monthly in revenue or processing, operating for at least six months, maintaining a credit score above 550, and running a legitimate registered business, you're probably eligible for merchant financing regardless of the factors that disqualify you from traditional loans.

The question isn't whether you're eligible, if you meet those basic criteria, you probably are. The question is whether the expensive capital MCAs provide makes strategic sense for your specific situation and needs. Eligibility is easy. Using that eligibility wisely is harder.