MCA field guide
How average daily balance affects MCA approval
Why two merchants with the same monthly revenue can present very different liquidity profiles.
Revenue shows volume; ADB shows cushion
Average daily balance approximates how much cash remains in the operating account across the month. A merchant can deposit substantial revenue while ending most days near zero because expenses and existing payments consume it immediately.
Underwriters compare ADB with the proposed payment
A proposed daily withdrawal that is large relative to typical balances can create operational stress even when monthly revenue clears the minimum. Existing debt payments must be considered in the same cash-flow view.
Use consistent statement data
ADB may come from bank analytics or a lender’s own calculation. Record the source and statement period instead of presenting a rough guess as verified data.
Methodology and corrections
This guide distinguishes calculations, common industry practice, and lender-specific policy. Criteria should be confirmed from the dated source on each lender profile. Report an error through the correction policy.