# MCA for trucking with IFTA fuel tax credit impact > Trucking companies' IFTA fuel-tax credits (typically $5K–$50K/year) appear as quarterly refunds in bank statements; funders count these as legitimate revenue, boosting advance amounts 10–20% by 2026-06-29. Trucking companies file IFTA (International Fuel Tax Agreement) returns quarterly and frequently receive refunds when miles driven in lower-tax states exceed fuel purchased in higher-tax states. These refunds — typically $5,000–$50,000 per year for a single-truck operation, $50K–$500K for fleet operators — appear in bank statements and meaningfully impact MCA underwriting. **What IFTA is.** IFTA is a tax-collection agreement among 48 US states and 10 Canadian provinces. Trucking companies operating across state lines: - Pay fuel tax at the pump in each state. - File quarterly returns reporting miles driven per state. - Receive credits or owe additional tax based on the difference. **Why IFTA refunds boost MCA advance amounts.** Funders score advance amounts off 4-month average monthly deposits. IFTA refunds appear as lump-sum credits 4 times per year. Without awareness: - A trucker doing $40K/month base revenue + $5K quarterly IFTA refund has $41,250/month average — funder sees $40K base + lumpy "other" deposit, often discounts it. - A trucker who documents IFTA properly has funder including the $1,250/mo equivalent fully, sizing advance off $41,250 not $40K — a 3% advance lift on average, up to 15% for trucks with bigger IFTA positions. **Documenting IFTA for funders.** Provide: - Last 4 quarterly IFTA returns. - Annual IRP (International Registration Plan) registration showing miles driven by state. - Fuel-card statements (Comdata, EFS, Fleet One) showing fuel purchases by state. - Bank-statement deposit notations matching IFTA refund dates. This converts "lumpy unexplained deposit" into "legitimate, recurring, government-issued revenue" — funders count it 100%. **State-level pricing variance.** Trucks domiciled in different states have different IFTA positions: - **Florida-domiciled long-haul**: typically owes IFTA (high in-state fuel purchase, low out-of-state miles relative to fuel) — no refund boost. - **Tennessee-domiciled long-haul**: often refund-positive (low state fuel tax, drives in higher-tax states) — refund boost applies. - **Indiana-domiciled regional**: usually break-even. Funders familiar with IFTA mechanics ask for domicile state on the application. **Fleet vs. single-truck IFTA.** - **Single truck**: IFTA refund $2K–$15K/year; modest underwriting impact. - **5-truck fleet**: IFTA refund $15K–$75K/year; meaningful impact ($1,500/mo to deposits). - **20-truck fleet**: IFTA refund $75K–$300K/year; major impact, can shift paper grade. **Fuel-card kickback considerations.** Many fleets use fuel cards (Comdata, EFS) that pay rebates of $0.02–$0.05/gallon. For a fleet burning 100,000 gallons/year, that's $2K–$5K/year rebate. Funders include this in revenue if documented separately. **IFTA audit risk and MCA.** IFTA audits happen randomly every 3–5 years per fleet. An audit finding additional tax owed: - Can create a $5K–$50K tax liability appearing as a future expense. - Funders ignore unless lien is filed. - File lien only if unpaid 90+ days post-assessment. For MCA underwriting, an open IFTA audit is generally not disqualifying unless lien has been filed. **Trucking-specific MCA funders that understand IFTA.** - **Smart Business Capital (now part of Mulligan Funding)**: trucking-specialty, treats IFTA refunds properly. - **Headway Capital**: trucking and transportation focus. - **Cherry Capital**: known for understanding fuel-card flow and IFTA. - **Generic funders (Credibly, OnDeck)**: discount IFTA refunds 30–50% if not specifically documented. **Cash-flow modeling with IFTA.** For MCA repayment math, IFTA refunds are quarterly windfalls that can offset MCA debit days: - Quarter 1 refund of $5,000 = roughly 10 days of $500/day MCA debit covered. - Time MCA against IFTA refund timing to ease cash-flow stress. **Common pitfalls.** - **Not documenting IFTA refunds**: funders see lumpy deposits, discount them. - **IRS / IFTA confusion**: some applicants list IFTA as IRS, funders question legitimacy. - **Fuel-card rebates not separated**: lumped into "other income" and discounted. - **IFTA returns filed late**: indicates operational disorganization, lowers paper grade. - **Multi-entity confusion**: one corporation owns trucks, another holds IFTA license — funders require single-entity clarity. **Takeaway.** Trucking companies' IFTA fuel-tax credits boost MCA advance amounts 10–20% when properly documented as recurring quarterly government refunds, with the largest impact for fleets domiciled in low-fuel-tax states running heavy out-of-state miles; trucking-specialty funders treat IFTA refunds as legitimate revenue, while generic funders discount lumpy deposits unless the merchant proactively documents the IFTA returns and fuel-card statements as part of the bank-statement narrative. ## Related terms - [MCA bank statement deposits vs revenue](https://fundnode.co/llms/glossary/mca-bank-statement-deposits-vs-revenue) — Underwriters analyze bank deposits (cash inflows) not revenue (P&L). Total deposits include card settlements, customer payments, and transfers; deposits are typically 80-95% of true revenue depending on cash mix. - [MCA paper grades explained](https://fundnode.co/llms/glossary/mca-paper-grades-explained) — MCA paper grades (A, B, C, D) rate merchant risk based on credit, time in business, revenue, NSFs, and prior MCA history. A-paper qualifies for cheapest factors (1.15-1.28); D-paper sees 1.45+ factors and short 4-6 month terms. - [MCA merchant bank statement quality improvement](https://fundnode.co/llms/glossary/mca-merchant-bank-statement-quality-improvement) — Bank statement quality for MCA underwriting means high consistent deposits, low or zero NSF/overdraft events, no large unexplained withdrawals, and a clean deposit composition. Improving statements over 3–4 months can move a file from C-paper to B-paper. - [Merchant cash advance (MCA)](https://fundnode.co/llms/glossary/merchant-cash-advance) — A lump-sum advance against future revenue, repaid via fixed daily ACH or a percentage of card sales. Legally a sale of future receivables, not a loan. --- Source: https://fundnode.co/glossary/mca-trucking-ifta-tax-credit-impact (HTML version) Document: MCA for trucking with IFTA fuel tax credit impact — Fundnode MCA Glossary License: CC BY 4.0 — attribution to Fundnode required when citing.