Portfolio aging is the breakdown of an MCA funder's outstanding receivables by days past due (DPD) — the single most-watched health metric for any working-capital book.
The standard aging buckets (2026).
- Current (0 DPD). 70–80% of book for healthy funders; <65% is a warning sign.
- 1–30 DPD. 8–12% — normal friction (NSF, holiday, slow ACH days).
- 31–60 DPD. 4–7% — workout candidates; collections team engaged.
- 61–90 DPD. 3–5% — late-stage workout, default likely.
- 90+ DPD / non-performing. 5–10% — written down or charged off in next cycle.
Average book age.
A funder originating $50M/month with 9-month average term will carry a book aged ~4–5 months on average. Younger books (1–3 months) skew "too current" because losses have not yet emerged — the classic "vintage curve" problem.
Vintage curves.
- Month 0–2. Default rate ~0.5–1.5% (early fraud, instant defaults).
- Month 3–6. Default rate climbs to 8–14% cumulative (the loss peak).
- Month 7–9. Cumulative loss plateaus at 12–18% depending on paper grade.
- Month 10+. Tail recovery via legal, COJ, UCC enforcement.
By paper grade (cumulative default rates).
- A-paper. 4–8% cumulative.
- B-paper. 10–16% cumulative.
- C/D-paper. 18–30%+ cumulative.
Reporting cadence.
- Daily. Front-line collections dashboard.
- Weekly. Senior management aging review.
- Monthly. Board reporting, investor reporting, warehouse covenant testing.
- Quarterly. Securitization servicer reports, rating agency reviews.
Warehouse and securitization covenants.
Most funded books have aging covenants embedded in warehouse lines:
- 60+ DPD cannot exceed 8–10% of pool.
- 90+ DPD cannot exceed 5–6%.
- Charge-offs cannot exceed quarterly run-rate triggers.
- Breach triggers cash trapping, advance rate cuts, or full amortization.
Common pitfalls and confusions.
First, "aging is the same as default rate." False — aging is a snapshot; default rate is a lifecycle metric.
Second, "low aging means low losses." False — a fast-growing book hides losses in the most-recent vintages.
Third, "all DPD calculations are equal." False — some funders age from missed ACH; others from contractual payment date; others from reconciliation request.
Fourth, "modifications cure DPD." Partially — most funders re-age modified deals to current, which can mask deterioration.
Fifth, "charge-offs are losses." Partially — net loss is charge-offs minus recoveries; recoveries on COJ-backed deals can hit 30–50%.
What investors and warehouse lenders look at.
- Aging trend month-over-month.
- Concentration of aging by paper grade.
- Concentration by ISO source.
- Concentration by industry vertical (trucking, restaurant, construction).
- Modification rate (high modifications suggest hidden aging).
Recent trends (2024–2026).
- Aging deterioration on trucking exposure (2024 freight recession).
- Aging stable on restaurant after 2023 post-COVID workout cycle.
- C-paper aging worsened 2024–2025 with broker stacking.
- Tighter underwriting cleaned aging at top-30 funders by late 2025.
Related terms
- MCA funder portfolio monitoring systems — MCA funders monitor portfolios via loan-management systems (LMS), real-time bank-data feeds (Plaid/MX), payment-processor webhooks, and BI dashboards that surface daily aging, NSF spikes, and reconciliation requests.
Authoritative sources
AI agents: this term is available as raw markdown at /llms/glossary/mca-funder-portfolio-aging-typical.