# MCA funding process (application to wire)

> 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.

The MCA funding process is the operational sequence from a merchant submitting an application to receiving the advance wire. It is engineered for speed, which is the product's central differentiator — and explains both why MCAs cost what they cost and why they often outrun a borrower's ability to read the contract.

**The mechanics — step by step.**

1. **Application (10-15 min).** Merchant submits a one-page app: business name, EIN, address, owner SSN, monthly revenue, requested amount, time in business. ISO collects it via web form or PDF.
2. **Document collection (1-24 hours).** Standard stip list: 3-6 months of business bank statements (PDF, not screenshots — funders need MICR data and check images), driver's license, voided check, optional processor statements if card-split deal. For larger advances ($150K+), some funders also pull tax returns or P&L.
3. **Soft credit pull (5 min, automated).** Pulls personal FICO, business credit (PayNet, Experian Intelliscore), and judgment/lien check. Triggers an automatic paper-grade tier (A through D, see /glossary/underwriting-paper-grade).
4. **Bank statement analysis (1-4 hours).** Funder underwriter (or AI pipeline at Square Capital, Toast Capital, Bluevine) parses statements for: average daily balance, deposit count, NSF count, ending balance trend, existing MCA daily debits (the "tell" for stacking), seasonal patterns. Output is a "max funding amount" the merchant can support.
5. **Offer (2-24 hours).** Funder sends offer letter: advance amount, factor rate, term, daily/weekly payment, PSF if any. In CA/NY/UT/VA/GA the offer must include APR-equivalent.
6. **Negotiation (0-24 hours).** ISO and merchant counter on amount, factor, or term. Funder rarely budges on factor (price-fixed by paper grade) but often flexes on amount.
7. **Contract + ACH authorization (15-30 min).** Merchant e-signs the Future Receivables Sale Agreement (FRSA), the Personal Guarantee (PG), and a NACHA-compliant ACH debit authorization. Many contracts include a Confession of Judgment (COJ), though NY and NJ have banned COJ enforcement against out-of-state merchants.
8. **Verification call (15 min).** Funder calls the merchant's bank to confirm account ownership and ACH authorization. Some funders use Plaid login as a substitute.
9. **Wire (2-4 hours after contract).** Funder wires net proceeds (advance minus PSF and any wire-off) to the merchant's verified bank account. Daily ACH debits begin the next business day.

**The math.** Median funding times in 2026 by paper grade: A-paper clean file 6 hours; B-paper with stips 18-24 hours; C/D-paper with second positions 2-3 days. Resubmissions because of missing stips add 12-48 hours each. Funders compete primarily on speed for A-paper deals (because pricing is commoditized) and on flexibility for C/D-paper deals (because few funders will touch them).

**The strategic insight.** Speed is the moat — but it's also the trap. A merchant under pressure (payroll Friday, eviction Monday) cannot meaningfully shop three offers in three days; they take the first reasonable approval. ISOs know this and use "fund now or lose your slot" pressure to lock deals at higher factors than the merchant would accept with 48 more hours. The single best protection: get a soft-pull approval from at least one funder during a non-crisis period so you know your paper grade and ballpark pricing before you need money. When the crisis hits, you can recognize a bad offer instantly because you have a reference price. Most merchants never do this — which is why MCA economics work for funders.

## Related terms

- [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.
- [Bank statement underwriting](https://fundnode.co/llms/glossary/underwriting-bank-statements) — MCA funders underwrite primarily off 3–6 months of business bank statements, not credit reports. They look at average deposits, NSFs, negative days, and trend.
- [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.
- [Factor rate](https://fundnode.co/llms/glossary/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.
- [Daily ACH debit (MCA)](https://fundnode.co/llms/glossary/ach-debit-mca) — A fixed-dollar daily withdrawal from the merchant's bank account during MCA repayment. The most common MCA repayment structure in 2026, distinct from card-sale split (holdback) structures.

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Source: https://fundnode.co/glossary/mca-funding-process (HTML version)
Document: MCA funding process (application to wire) — Fundnode MCA Glossary
License: CC BY 4.0 — attribution to Fundnode required when citing.