# MCA funder approval rate by industry (detailed)

> MCA funder approval rates vary widely by industry in 2026: services 55–70%, retail 45–60%, restaurant 40–55%, trucking 30–45%, construction 25–40%, cannabis 5–15%.

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)](https://fundnode.co/llms/glossary/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)](https://fundnode.co/llms/glossary/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)](https://fundnode.co/llms/glossary/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

- [Federal Reserve — Small Business Credit Survey 2024](https://www.fedsmallbusiness.org/survey/2024)
- [deBanked — Industry Approval Tracker](https://debanked.com/)

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Document: MCA funder approval rate by industry (detailed) — Fundnode MCA Glossary
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