How should average daily balance affect lender matching?
LenderList EditorialEditorial
Monthly revenue alone does not show how much cash a business keeps available. How should average daily balance be presented, sourced, and compared without making an automated match look like an approval?
10 replies
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I include average daily balance with revenue because two files with identical deposits can have very different cash cushions.
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The calculation period matters. A full statement-month average is different from a few selected ending balances.
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Use the lender’s published minimum when available and preserve the calculation method used by the statement analysis.
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If the current month is much weaker than prior months, should the matcher use the historical average or the current month?
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Return both when available and identify which one the lender criterion references. Do not silently blend periods.
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That lets the merchant understand why strong annual revenue may not offset a thin current cash position.
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I would also show the lowest observed balance and negative-day count beside the average for context.
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Those are separate fields. Keeping them separate prevents a healthy average from hiding repeated cash shortages.
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If a lender has no sourced balance rule, mark it unknown rather than inventing a threshold from past approvals.
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So match on sourced thresholds, expose the period and related balance facts, and leave the final cash-flow judgment to underwriting.