How to Pre-Qualify Merchants for MCA

Every deal you submit tells a funder something about how you work. If your files are consistently incomplete, unqualified, or mismatched, they may start to see your name as a red flag. That is why pre qualifying merchants is one of the most valuable habits you can develop early on as an ISO. It helps you save time, avoid frustration, and increase your closing ratio without needing extra cost or tools.

Why Pre-Qualification Matters More Than You Think

Skipping this step often leads to declined deals, delays, and awkward conversations with merchants. Funders notice when an ISO sends in anything and everything. But they remember the ones who take time to filter deals properly. Pre-qualifying is not about saying no to everyone. It is about making smarter decisions on who to say yes to.

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Key Indicators to Evaluate Before Submitting

There is no one size fits all formula for MCA approvals, but experienced ISOs know the key signals that separate fundable merchants from risky ones. These are the most important areas to evaluate:

• Monthly revenue: Most funders require at least $10,000 in consistent monthly deposits. Look at both amount and stability over the last three months.

• Time in business: Merchants under six months are rarely approved. Longer time in business typically means lower risk and higher funding potential.

• Industry type: Some industries like construction or auto sales are considered higher risk. Know what your funders prefer or avoid.

• Daily balance patterns: If a merchant’s account drops below $500 regularly, it may be a sign of poor cash management.

• Negative bank activity: Frequent overdrafts, bounced checks, or NSFs are major red flags for underwriters.

• Existing advances: Too many active positions may lead to instant declines or partial offers. Ask how much is owed and who is collecting.

• Average ticket size: Extremely high or low transaction sizes can make underwriting difficult. Look for patterns that match your funder's comfort zone.

Taking just ten minutes to assess these areas gives you a better sense of whether the deal is worth submitting at all.

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Ask the Right Questions Early

The best way to qualify merchants is to stop relying only on documents and start having smarter conversations. Asking a few focused questions in the first call or meeting can give you more clarity than a full application.

• What is your average monthly revenue?

• How long have you been in business?

• Do you currently have any other advances?

• Have you had any bounced checks in the past three months?

• What are you looking to use the funding for?

• Do you manage your business from a single account or multiple accounts?

• How quickly do you need the funds?

These simple questions give you a window into both the merchant’s risk level and how serious they are about funding.

Pre qualification is not a formality. It is your filter. The better you get at spotting who is ready and who is not, the faster your deals move and the stronger your reputation becomes. Funders prefer working with ISOs who send in clean, fundable deals, not just anyone with a bank statement. Taking the time to pre qualify does not slow you down. It sets you apart.