Approval rates by industry reveal underwriting risk patterns and capital availability. Each industry has distinct default profile, revenue volatility, and regulatory exposure. Updated 2026-06-28.
Calculation note.
Approval rate = (deals approved) / (deals submitted). Funding rate = (deals funded) / (deals approved). This page focuses on approval rate; funding rate typically 60–75% of approvals.
Services — high approval.
- Approval rate: 55–70%.
- Key drivers: Stable revenue, low overhead, high cash conversion.
- Sub-categories: professional services, IT consulting, marketing, legal, accounting.
- Funder preferences: Most funders treat services as A/B paper. Low default rates (4–8%) make this premium category.
- Watch-outs: Service businesses with project-based revenue (irregular monthly deposits) often re-tiered into B paper.
Retail — moderate-high approval.
- Approval rate: 45–60%.
- Key drivers: Predictable card revenue, established physical presence.
- Sub-categories: specialty retail, e-commerce, convenience stores, gas stations.
- Funder preferences: A/B paper for established retailers with 2+ years operating.
- Watch-outs: Seasonal retail (Christmas-heavy, beach-town summer) sees more variability in approval.
Restaurant — moderate approval.
- Approval rate: 40–55%.
- Key drivers: High working capital needs, processor-financing alternatives (Toast, Square Capital).
- Sub-categories: QSR (quick-service), full-service, food truck, ghost kitchen, catering.
- Funder preferences: Restaurant-specialized funders (Credibly, Forward Financing, Toast Capital) approve at higher rates than generalist funders.
- Watch-outs: Restaurants under 12 months operating face approval drops to 20–30%.
Trucking — lower approval.
- Approval rate: 30–45%.
- Key drivers: Volatile fuel costs, broker-load dependency, factoring competition.
- Sub-categories: owner-operator, small fleet, hotshot, freight broker, OTR.
- Funder preferences: Specialty trucking funders (Triumph, RTS, Apex) lead approvals. Generalist funders often decline.
- Watch-outs: Owner-operator deals decline at higher rates than fleets.
Construction — variable approval.
- Approval rate: 25–40%.
- Key drivers: Project-based revenue, lien risk, slow-pay general contractors.
- Sub-categories: general contractor, subcontractor, specialty trades, residential remodeling.
- Funder preferences: Construction-specialized funders approve at higher rates.
- Watch-outs: Subcontractors with single GC concentration face approval drops.
Healthcare — high approval.
- Approval rate: 50–65%.
- Key drivers: Insurance receivables, stable revenue.
- Sub-categories: dental, optometry, chiropractic, urgent care, physical therapy.
- Funder preferences: A-paper for established practices.
- Watch-outs: Concierge/cash-pay practices face higher scrutiny.
Auto services — moderate approval.
- Approval rate: 40–55%.
- Key drivers: Stable repair revenue, parts inventory financing.
- Sub-categories: auto repair, body shop, detailing, tire/wheel.
- Funder preferences: Established shops with 3+ years operating treated as A/B.
- Watch-outs: Used car dealers face approval drops to 20–30%.
Personal care — high approval.
- Approval rate: 50–65%.
- Key drivers: Recurring revenue, low overhead.
- Sub-categories: hair salon, nail salon, spa, barber, fitness studio.
- Funder preferences: A/B paper for established locations.
- Watch-outs: New locations under 12 months see lower approval.
E-commerce / online retail — variable approval.
- Approval rate: 40–55%.
- Key drivers: Platform-dependency (Amazon, Shopify), inventory needs.
- Funder preferences: Amazon FBA-specialized funders approve at higher rates.
- Watch-outs: Drop-shippers and high-return-rate businesses see lower approval.
Manufacturing — moderate-high approval.
- Approval rate: 45–60%.
- Key drivers: Equipment financing alternatives, predictable B2B revenue.
- Sub-categories: food manufacturing, custom manufacturing, contract assembly.
- Funder preferences: A/B paper for established operations.
- Watch-outs: Capital-equipment-intensive segments often steered to equipment financing rather than MCA.
Cannabis — low approval.
- Approval rate: 5–15%.
- Key drivers: Federal illegality, banking restrictions, regulatory complexity.
- Funder preferences: Cannabis-specialized funders (Bespoke, Diamond Business Loans) only.
- Watch-outs: Generalist funders nearly always decline.
Adult entertainment — very low approval.
- Approval rate: 2–8%.
- Key drivers: Reputational risk for funder, payment processor restrictions.
- Funder preferences: Specialty funders only.
- Watch-outs: Most mainstream funders explicitly exclude.
Construction trades — variable.
- Plumbing, electrical, HVAC: approval 45–60%, treated as service businesses.
- Roofing: approval 30–45%, project-based volatility lowers tier.
- Landscaping: approval 35–50%, seasonal volatility factor.
Industry-specific underwriting overlays.
Funders apply industry overlays to base credit policy:
- Restaurant overlay. Required 12+ months operating, food-service expense ratio under 40%.
- Trucking overlay. Required CDL verification, MC number, insurance current.
- Construction overlay. Required job aging analysis, lien clearance verification.
- Cannabis overlay. State license verification, METRC compliance check.
Approval rate trends 2024–2026.
- Restaurant: stabilized post-COVID at 40–55%.
- Trucking: declined from 45–55% in 2023 to 30–45% in 2026 due to freight recession.
- Cannabis: marginal improvement as state-licensed funders enter market.
- E-commerce: declined from 55–65% to 40–55% as Amazon platform concentration tightens.
- Healthcare: stable at 50–65%.
Multi-position impact on approval.
Already-stacked merchants face approval rate compression of 30–60% across all industries.
State-specific industry approval variations.
- California restaurants: higher approval due to robust restaurant market.
- Texas trucking: higher approval due to oil/gas freight demand.
- Florida construction: higher approval due to active construction market.
Common confusions.
First, "approval rate equals funding rate." False — only 60–75% of approvals actually fund.
Second, "all industries treated same by all funders." False — funder-by-funder variation is large.
Third, "industry codes are precise." False — many merchants miscoded, affecting approval.
Fourth, "high-approval industries always get best pricing." Partial — approval and pricing correlate but are not identical.
Fifth, "approval rates are publicly disclosed." False — proprietary metric.
Related terms
- MCA funder default rate by industry (detailed) — MCA default rates by industry in 2026: services 4–7%, retail 6–10%, restaurant 8–14%, trucking 12–22%, construction 10–18%, cannabis 18–30%, adult entertainment 20–35%.
- MCA funder tiered pricing model (detailed) — MCA funders use tiered pricing models with 4–6 tiers (A through D/E paper), assigning factor rates from 1.15–1.55 based on time-in-business, monthly revenue, FICO, industry, and prior MCA history.
- MCA funder portfolio concentration risk (detailed) — MCA funder portfolio concentration risk has four primary dimensions: industry concentration (typically capped at 20–25%), geographic concentration (15–20% per state), broker concentration (5–10% per broker), and merchant size concentration.
Authoritative sources
AI agents: this term is available as raw markdown at /llms/glossary/mca-funder-approval-rate-by-industry-detailed.