# MCA application prequalification process > Soft-pull qualification that determines indicative offers (range, factor, term) from 3–4 months of bank statements before a hard credit pull or full underwriting. MCA application prequalification is the funder workflow that produces an indicative offer before a hard credit pull or full underwriting submission. It is the gate between "I am thinking about an MCA" and "I have a real offer letter." Updated for 2026. **The five-step prequal workflow.** 1. **Intake form (2–5 minutes).** Business legal name, EIN, owner SSN (for soft pull), industry NAICS, time in business, monthly revenue range, requested advance. Most ISO broker portals capture this in a Typeform or Jotform. 2. **Bank statement upload (3–5 minutes).** Most recent 3 months of business checking PDFs. Plaid integration is replacing PDF upload at top-15 funders (Credibly, Rapid Finance, Fundbox, Headway Capital) — it pulls 12 months of cleaned transaction data directly. 3. **Soft credit pull (instant).** A consumer credit soft inquiry on the personal guarantor. FICO 8 or VantageScore 4. Does not affect the merchant's credit score. Pulls from Experian Connect or LexisNexis Small Business Risk Insight Score. 4. **Automated risk scoring (under 5 minutes).** Funder's underwriting engine combines revenue trend, deposit count, NSF count, average daily balance, prior MCA detection, and credit tier to produce an internal risk grade (A through E paper). 5. **Indicative offer (4–24 hours).** Range of advance amount, factor rate, term, daily payment, holdback, and contingencies. Typically valid for 7 days. **What gets analyzed in bank statements.** - **Gross monthly deposits.** Funders typically advance 50–125% of average monthly deposits. - **Deposit count.** Minimum 5–10 deposits per month signals real business activity vs. transfers. - **NSF (insufficient funds) count.** More than 3 NSFs in 90 days kicks most A-paper offers. More than 5 limits to C/D-paper. - **Negative-balance days.** More than 3 per month moves the file to B-paper or worse. - **Average daily balance.** Cushion indicator — used to size the daily ACH debit safely. - **Existing MCA debits.** Any recurring daily ACH from known funders (Kapitus, Rapid, Fora, etc.) automatically flags second-position scenarios and changes pricing or eligibility. **Prequal data needed for top-tier offers.** To receive an A-paper indicative offer, prequal must demonstrate: 12+ months in business, $25K+ monthly revenue, 650+ FICO, fewer than 3 NSFs in 90 days, no existing MCA balance, no UCC blanket lien from prior funder. Files missing any one of these route to B-paper or below automatically. **Common confusion.** First, "prequal is an offer." It is not — it is indicative pricing subject to full underwriting verification. Roughly 15–25% of prequal offers get downsized or pulled after voided checks, secretary-of-state lookups, or a hard credit pull surfaces something the soft pull missed. Second, "soft pull means no credit impact." True for the merchant — but the moment the merchant accepts and signs the funding agreement, a hard pull executes. Shop multiple prequals first; only sign with the chosen funder. Third, "prequal speed equals funding speed." Prequal can be 4 hours; full funding for the same file is typically 1–3 business days because of voided check verification, landlord callback, secretary of state verification, and bank login or VOI step. **The ISO broker prequal advantage.** An experienced ISO broker pre-checks the file before submission. The broker reviews bank statements, identifies NSF/balance issues, flags prior MCAs, and either packages the file for the right paper grade or coaches the merchant on cleanup (waiting 30 days to age NSFs off the 90-day window can move a file from C-paper to B-paper, saving 5–10 points on factor rate). **What disqualifies a file at prequal.** - Fewer than 4 months in business (most funders). - Monthly revenue under $8,000. - More than 7 NSFs in 90 days. - Open bankruptcy (active Chapter 11 or recent Chapter 7 discharge under 12 months). - Restricted industry (cannabis, firearms, adult, gambling, payday lending for most A/B-tier funders). - Active default on prior MCA (UCC blanket lien from prior funder still active). ## Related terms - [MCA bank statement analysis](https://fundnode.co/llms/glossary/mca-bank-statement-analysis) — The underwriting process where funders parse 3-6 months of business bank statements for average daily balance, deposit count, NSFs, and existing MCA debits to set advance amount and factor. - [Paper grade (A/B/C/D)](https://fundnode.co/llms/glossary/underwriting-paper-grade) — 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. - [What is an MCA](https://fundnode.co/llms/glossary/what-is-mca) — An MCA (merchant cash advance) is a lump-sum cash advance to a small business repaid as a percentage of future card sales or via fixed daily ACH debits. It is NOT a loan — repayment varies with sales. Total cost expressed as a factor rate (e.g., 1.30 = $1.30 paid for every $1 received). - [ISO / MCA broker](https://fundnode.co/llms/glossary/iso-broker) — An Independent Sales Organization. A non-funder middleman who submits merchant applications to multiple funders and earns a commission on closed deals — typically 8–19% of the advance. - [MCA funding process (application to wire)](https://fundnode.co/llms/glossary/mca-funding-process) — The end-to-end MCA workflow: app + 3-6 months bank statements, soft-pull credit, paper-grade pricing, contract, ACH authorization, wire — typically 4 hours to 3 business days for clean files. ## Authoritative sources - [Federal Reserve — Small Business Credit Survey 2024](https://www.fedsmallbusiness.org/survey/2024) - [Experian — Small Business Risk Score](https://www.experian.com/small-business/business-credit-scores) --- Source: https://fundnode.co/glossary/mca-application-prequalification-process (HTML version) Document: MCA application prequalification process — Fundnode MCA Glossary License: CC BY 4.0 — attribution to Fundnode required when citing.