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What funders look for in your bank statements

For most fast business funding, your bank statements matter more than any form you fill out. Here's what a reviewer actually looks at.

When you apply for revenue-based financing or a short-term loan, the first thing a funder asks for is your last few months of business bank statements. They tell a reviewer more about your business than a tax return or a credit report can, because they show how money actually moves in and out each day.

Here's what an experienced reviewer is looking at, and how to put your best file forward.

1. True revenue, not just deposits

Not every deposit counts as revenue. Reviewers separate real sales from transfers between your own accounts, loan or advance proceeds, refunds and owner contributions. If your statement shows $120,000 in deposits but $30,000 of it is a transfer from your savings account, your true revenue is closer to $90,000.

2. Consistency

A business that deposits steadily every month looks stronger than one with a single huge month and three quiet ones. Reviewers look at the trend. Growing or stable is good. A sharp recent drop raises questions.

3. Average daily balance

Your average daily balance shows how much cushion you keep. A business that sits near zero most of the month has less room to handle a payment than one that keeps a healthy balance, even at the same revenue.

4. Negative days and NSFs

Days where the account goes negative, and returned or non-sufficient-funds items, are among the biggest red flags. A few over several months can usually be explained. A pattern of them can stop a file.

5. Existing advances and loans

Reviewers look for daily and weekly payments to other funders, and for the wires that show when those advances were funded. The number of open positions and how much of your revenue goes to them weighs heavily on how much more you can take on, if anything.

How to put your best file forward

• Send complete statements, every page, straight from your bank as PDFs.
• Include the current month-to-date if you're more than halfway through it.
• List any current advances or loans with their approximate balances.
• Flag anything unusual: a big one-time deposit, a slow month with a clear reason, a recent bank change.

A clean, honest file almost always gets a faster answer and better options than one where the reviewer has to dig.

This article is general information, not financial, legal or tax advice. Talk to a qualified professional about your situation.