What Are the Approval Rates for Merchant Cash Advances? (The Real Answer)

I spend about half my day on the phone explaining to business owners why their local bank turned them down. It’s frustrating. You’ve got a business that’s clearly making money, customers are walking through the door, inventory is moving, but because your credit score took a hit back in 2021 or you don't have three years of perfect tax returns, the bank manager just shrugs.

So, naturally, you start looking at alternatives like Merchant Cash Advances (MCAs). And the first question I usually get—right after "how much can I get?"—is "what are my odds of actually getting approved?"

Look, I'm gonna be real with you. There isn't one single national statistic that every funder agrees on. We don't all report to some central database.

But generally speaking? The approval rate for merchant cash advances hovers somewhere between 70% and 80%. Compare that to big banks, where approval rates for small business loans are often sitting miserably below 20%, closer to 13-14% depending on the quarter.

Why are the approval rates so high?

It comes down to what we’re actually looking for. When I open up a file at LoanQuail, I’m not digging through your personal assets looking for collateral. I'm not trying to figure out if you own your home or if your car is paid off.

An MCA isn't a loan in the traditional sense; it’s a purchase of your future revenue. That changes everything.

Because we're buying future receipts, the only thing that really matters is: Do you have revenue?

If you have consistent deposits hitting your business bank account every month, your odds of approval skyrocket. We had a client a few months back, a contractor down in Florida. His credit was shot—I mean, low 500s. He went through a messy divorce that wrecked his personal finances. But his business? He was doing $60,000 a month consistently. He got funded in 24 hours. A bank wouldn't have even let him finish filling out the application.

Does credit score matter at all?

Yes and no. Mostly no.

Here's the thing. If you have a 450 credit score, it tells us there’s some chaos in the background. But it’s not an automatic "no." It just means the "factor rate" (the cost of the funds) might be a little higher because the risk is higher.

However, if you have a 700+ FICO, you're obviously going to qualify for better terms, longer durations, and cheaper money. We offer business lines of credit and other products for those scenarios. But for a standard MCA? We care 90% about cash flow and maybe 10% about credit.

Honestly, the only time credit really kills a deal is if there is an active bankruptcy that hasn't been discharged yet. That’s a hard stop for almost everyone in this industry.

Okay, so what actually gets you declined?

If approval rates are 70-80%, that still leaves 20-30% of people getting declined. I want to clear this up because usually, it’s not for the reasons you think.

When we decline a file at LoanQuail, it’s rarely because the business isn't profitable enough on tax returns. It’s usually one of these specific deal-killers we see on the bank statements:

• Too many Negative Days: If your bank account balance ends in the negative 10 days out of the month, that’s a problem. It means if we withdraw a payment, you might bounce.
• nsfs (Non-Sufficient Funds): Similar to above. If you have 15 bounced checks last month, funding you is too risky.
• Gambling charges: I see this more often than you'd think. If the business bank statements are full of DraftKings or casino withdrawals, underwriters get nervous.
• Already over-leveraged: This is a big one. If you already have three other cash advances stacked on top of each other, getting a fourth one is usually a bad idea for your business, and we won't do it. We aren't here to drown you.

The "Time in Business" Factor

Most funders, including us, need to see that you’ve been operating for at least 6 months. Some will do 3 months if the revenue is huge, but generally, 6 months is the sweet spot.

If you started your business last Tuesday, you’re not going to get approved for an MCA. You need a track record of deposits so we can calculate the average. We can't buy future sales if we don't know what your past sales look like.

How to improve your approval odds before applying

If you're thinking about applying next week, take a look at your last 30 days of bank activity. Do you have a positive daily balance? Are you depositing money frequently?

Consistency helps. If you deposit $50,000 on the 1st of the month and nothing else for 30 days, that looks riskier than a restaurant depositing $1,500 every single day. Consistent cash flow suggests a stable operation.

Also, don't shotgun your application to fifty different brokers. I had a guy call me recently who had applied with twelve different companies in one afternoon. His credit report looked like it had been through a war zone with inquiries. It makes you look desperate, and underwriters smell desperation. Just find a direct funder or a trusted partner (like us) and let them work the file.

Is an MCA right for everyone?

No. Absolutely not.

If you can wait three months for an SBA loan and you have 750 credit and tons of collateral, go do that. The rate will be lower. I tell merchants that all the time.

But if you need to buy inventory today to make a sale next week, or if an oven broke down and you can't open the kitchen, or if payroll is due on Friday and you're waiting on a big check from a client... that is where the high approval rate of an MCA saves the day. Speed costs money, but sometimes lack of speed costs you the business.

Ready to see where you stand?

We try to make this as painless as possible. At LoanQuail, we don't use hard credit pulls to check your eligibility, so looking into it doesn't hurt your score.

We just look at your business health. If you're doing over $15,000 a month in revenue and have been running for six months or more, there's a very good chance we can get you an offer. Maybe it's an MCA, maybe it's a Line of Credit. We'll figure that out together.

Don't overthink the statistics. Just check your options.

Check Your Eligibility with LoanQuail Here