Every mainstream MCA funder operates a tiered pricing matrix. Files are scored on a multi-factor underwriting grid and slotted into a pricing band that maps to factor rate, term, and advance ceiling. Understanding the tiers is the difference between an informed price negotiation and accepting whatever the funder offers.
The five underwriting inputs.
- Time in business (TIB). 12+ months = A-paper eligible; 6–12 months = B-paper ceiling; under 6 months = C/D-paper only.
- Personal FICO of the guarantor. 700+ = A-paper; 650–699 = B-paper; 600–649 = C-paper; under 600 = D-paper or decline.
- Average monthly deposits. $50K+ = A eligible; $25K+ = B; $15K+ = C; $10K+ = D.
- NSF count (90 days). 0–2 = A; 3–5 = B/C; 6+ = D or decline.
- Industry. Tier-1 industries (medical, professional services, manufacturing) price 2–3 points better than tier-3 (restaurants, trucking, construction).
A-paper / Tier 1 pricing band (2026).
- Factor: 1.15–1.28.
- Term: 9–18 months.
- Advance ceiling: 100–125% of monthly deposits.
- Hold-back equivalent: 6–9% of monthly deposits.
- APR equivalent: 35–55%.
- Approval time: 4–24 hours.
- Decision algorithm: typically partially automated for clean files under $100K.
B-paper / Tier 2 pricing band (2026).
- Factor: 1.28–1.40.
- Term: 6–12 months.
- Advance ceiling: 75–100% of monthly deposits.
- Hold-back equivalent: 10–14% of monthly deposits.
- APR equivalent: 55–85%.
- Approval time: 24–48 hours.
- Decision: hybrid (automated screen + analyst review).
C-paper / Tier 3 pricing band (2026).
- Factor: 1.40–1.49.
- Term: 4–9 months.
- Advance ceiling: 50–75% of monthly deposits.
- Hold-back equivalent: 14–18% of monthly deposits.
- APR equivalent: 85–130%.
- Approval time: 24–72 hours.
- Decision: full analyst review; stips heavy.
D-paper / Tier 4 pricing band (2026).
- Factor: 1.49–1.60+.
- Term: 3–6 months.
- Advance ceiling: 25–50% of monthly deposits.
- Hold-back equivalent: 18–25%+.
- APR equivalent: 130%+.
- Approval time: 48–96 hours.
- Decision: extensive analyst review; often requires second-position position guard rails.
How the tiering flows.
Underwriter pulls bank statements, runs them through an automated scorer (Heron, MCA Track, or funder-proprietary), gets a paper grade, then layers in industry + state + position adjustments. Final tier may shift one band up or down from the algorithmic output based on analyst judgment.
Industry adjustments.
- Trucking: typically −1 tier (B-paper merchant prices at C-paper factor).
- Restaurants: −0.5 tier on average.
- Construction: −1 tier.
- Medical, dental, legal, accounting: +0.5 tier (priced better than headline).
- Auto repair, beauty salons: flat.
Position adjustments.
- First-position MCA: standard tier.
- Second-position: typically −1 tier (factor +5–8 points).
- Third-position: most funders decline; if approved, D-paper pricing minimum.
Common confusion.
First, "I have an 800 FICO so I'm A-paper." False — TIB and deposits matter more in MCA than personal credit.
Second, "tiers are negotiable." Partially — within a band, yes; across bands, almost never.
Third, "all funders use the same tiers." False — labels vary (some use 1–5, some use A–E, some use platinum/gold/silver), but ranges overlap heavily.
Fourth, "broker can move me up a tier." Broker can present the file better but cannot override underwriting.
Fifth, "Toast/Square use the same tiering." Mostly false — processor-funded MCAs use processor data exclusively and have their own scoring.
Related terms
- Paper grade (A/B/C/D) — MCA industry shorthand for merchant credit quality. A-paper qualifies for cheapest factor (1.15–1.28); D-paper is high-risk, factor 1.45+, often declined.
- Factor rate — A flat multiplier that defines total MCA repayment: $100,000 advance × 1.30 factor = $130,000 repaid. It is not an interest rate; it does not compound.
- MCA funder credit tier paper grades — detailed (2026) — MCA paper grades A through D map to FICO, TIB, deposits, NSFs, and industry — A: 700+ FICO, 18+ months TIB, $50K deposits; D: 550 FICO, 6 months TIB, $10K deposits. 2026 cutoffs.
- MCA funder bank-statement deposit-volume threshold (2026) — Funders set minimum monthly bank deposits — typically $10K (D-paper), $15K (C-paper), $25K (B-paper), $50K+ (A-paper) — to qualify an MCA file. Updated 2026-06-28.
- MCA funder approval rate by industry (2026) — 2026 MCA approval rates by industry: medical 78%, professional services 72%, retail 65%, restaurant 58%, trucking 52%, construction 48%, beauty 55%, auto repair 60%.
Authoritative sources
AI agents: this term is available as raw markdown at /llms/glossary/mca-funder-tiered-pricing-model.