[mikem]

Can anyone give some insight?
Is debt only MCA debt? Only daily MCA?
Is there common practice as to what % should not be exceeded?
Which funders have the higest Debt to Rev, %?

Are there legalities

When I entered this industry a year ago, I was told that if a merchant qualifies, he will be advanced a dollar amount of anywhere between 85%-115% of his monthly rev.
Recently I heard 65%
and now I'm hearing 15% by some funders.

Please enlighten me. Or just tell me to F off instead of going on a "n00b rant"

Thanks

[Zach]

Most lenders have a payment-deposit-ratio (PDR) that they are comfortable with. Eg: - 10% of your gross revenue goes towards daily payments. Higher-risk funds typically accept from 18-30% PDR, lower-risk funds will use a lower metric.

This isn't the only determining factor, of course, but it does come into play.

[anonymous]

Can anyone give some insight?
Is debt only MCA debt? Only daily MCA?
Is there common practice as to what % should not be exceeded?
Which funders have the higest Debt to Rev, %?

Are there legalities

When I entered this industry a year ago, I was told that if a merchant qualifies, he will be advanced a dollar amount of anywhere between 85%-115% of his monthly rev.
Recently I heard 65%
and now I'm hearing 15% by some funders.

Please enlighten me. Or just tell me to F off instead of going on a "n00b rant"

Thanks

Typically just referring to daily/weekly mca. Some lenders/funders count others as a competitor balance, whereas one of their competitors may not. That portion comes down to knowing your lenders.

(Total Daily Payments * 21) / Average Monthly Deposits (net) = # you are looking for.
or (weekly pmt*52/12) / ...

You are mixing up two different safeguards. Max % of monthly revenue as principal/advance amount and max % of MCA payments in relation to average monthly revenue. Two different things.

...oh, and **** off

[MCNetwork]

General rule of thumb is that you don't want to take more than 15% of a merchant's gross monthly revenue to repay the advance. If you use this guideline, then a merchant that does $15,000 per month revenue can afford to pay $2250 per month towards an advance. For a typical 7 month cash advance, he will pay back $15,750 ($2250 x 7). Assuming a typical 1.32 factor, he will qualify for an advance of around $12,000 which is equivalent to 80% of his gross monthly revenue. Obviously, for 10-12 month terms, he'll qualify for around 100-120% of monthly revenue. Now these numbers assume that the merchant has strong average daily balances. If they are weak, then he will qualify for a much lower amount.