how much funding can your shop actually get?

deposits are the number that matters

most owners walk into this expecting the conversation to be about revenue. it is not. it is about deposits, which is a narrower thing, and the gap between the two is where most surprises live.

a provider underwriting a revenue-based advance is buying a slice of future receivables and collecting it out of your bank account. so the only question that matters to them is how much money reliably lands in that account and how steadily it arrives. everything else is context.

that is why bank statements are the file. a pos report is a number you produce. a tax return is a number you report, and it lands nine months late. a projection is a number you hope for. a bank statement is a number the bank confirms, dated, in order, with the balance after each one. it is the only document in the stack that is hard to argue with.

so an underwriter opens three or four months of statements and pulls out a short list of figures: total deposits per month, the count of deposit days, the average daily balance, the number of negative days, the nsf and overdraft items, and anything that looks like an existing advance debiting on a schedule. from that they build an average monthly deposit figure. that figure, adjusted for the rest of the list, is what an offer gets sized against.

one practical consequence: transfers between your own accounts usually get stripped out. if you move money from savings into checking, that shows up as a deposit on the statement, and a careful underwriter will back it out. the same goes for a loan disbursement, an owner contribution, or a refund. what counts is money customers paid you.

our guide to reading your bank statements walks through the same pass line by line, so you can run it on your own file before anyone else does.

how offers get sized

once there is an average monthly deposit figure, sizing follows a simple shape: the offer is commonly expressed as a share or a small multiple of one month of deposits. that is the whole concept. a shop depositing $30,000 a month and a shop depositing $300,000 a month are being measured on the same ruler.

we are not going to publish a specific multiple, and you should be careful with any site that does. the multiple is not a market constant. it moves with how long you have been in business, how steady the deposits are, whether you already have a position, what state you are in, what the provider's appetite looks like that week, and how your category underwrites. the same file sent to three providers on the same morning routinely comes back with three different numbers.

for illustration only: a shop averaging $60,000 a month in deposits is generally having a conversation measured in tens of thousands, not hundreds of thousands. that is an illustration of scale to set expectations, not an offer, not a promise, and not a range anyone can commit to before reading your statements.

two other things shape the size. the first is position. a first-position advance — nothing else debiting — gets sized against the full deposit picture. a second position gets sized against what is left after the first one takes its cut, which is a smaller pool, so the number drops sharply. the second is term. a provider willing to spread remittance over a longer window can often support a larger amount, because the daily payment stays inside what the account can carry.

it is also worth knowing that an initial number is often not the final number. providers commonly open lower on a first-time file and size up on a renewal, after they have watched you remit for a few months. our guide to renewals covers how that second round usually works, including the part owners get caught by.

what reduces your number

these are the items that move an offer down, roughly in the order they come up. none of them is automatically disqualifying, and several are fixable inside a quarter.

• existing advances and daily debits. the largest single factor. a provider adds up what is already leaving the account each day and sizes what is left. two or three active positions can take the available number close to zero, and many existing agreements treat a new advance as a breach. our stacked positions page covers what usually makes more sense at that point.
• nsfs and negative days. bounced items are the loudest thing in a statement file. one isolated item with a reason is usually survivable. a pattern across months reads as an account that cannot absorb another daily debit, which is exactly the question being asked.
• a declining trend. if month three is well below month one, underwriting tends to weight the most recent month rather than the average. a falling file often gets sized off its worst month, which is a much smaller number than the owner had in mind.
• short time in business. under six months, most revenue-based providers will not look at all. between six and twelve months, offers are sized conservatively because there is no history showing what a slow season does to the account.
• heavy seasonality. a shop that does most of its year in four months looks risky on a fixed daily remittance, because the debit does not shrink when the deposits do. seasonal files often get smaller amounts, or a structure that flexes with volume.
• lumpy deposits. $50,000 arriving across 25 days reads differently than $50,000 arriving in three transfers. daily card batches show a business that operates every day, which is what the remittance schedule depends on.
• low average daily balance. an account that runs near zero between deposits says the cash is already spoken for. a thin balance can shrink an offer even when the monthly total looks healthy.

what raises your number

the good news is that the levers on this side are mostly things you control, and most of them work on a 60-to-90-day timeline rather than overnight.

• deposit consistency. steady beats large. an account showing deposits on 24 days a month with a flat total is easier to underwrite than one with a great month followed by a poor one. consistency is the thing that gets rewarded most and talked about least.
• more months of history. time in business is the one input that improves on its own. crossing twelve months and then twenty-four months commonly opens both more providers and larger sizing against the same deposits.
• depositing your cash revenue. money kept out of the account does not exist to underwriting. running it through the business account is the most direct way to raise the measured revenue, with the caveats in the next section.
• clean recent months. no nsfs, no negative days, and a flat or rising trend across the last three months. recency matters more than depth here. a rough month six months back matters far less than a rough month last month.
• paying down or paying off an existing position. once a first advance is well past halfway, the available room reopens. some owners are better off waiting six weeks for that than taking a small second position now.
• one business account, used like one. revenue split across three accounts makes every one of them look smaller. consolidating into a single operating account gives underwriting one clean picture. our business banking page covers account setup for this category.

why cash-heavy shops often qualify for less than they think

this is the single biggest gap in this vertical, and it deserves a plain explanation rather than a polite one.

smoke shops, vape stores, and head shops run a lot of cash. depending on location and mix, cash can be a third of the register or more. plenty of owners keep a meaningful share of it out of the bank — it pays a vendor, it covers a shift, it sits in the safe. from a day-to-day operating view that is normal. from an underwriting view it is invisible.

the consequence is direct. a shop doing $90,000 a month across the register that deposits $55,000 gets underwritten as a $55,000 shop. the offer is sized off the smaller number, and the owner hears a figure that feels wrong because they know what the shop actually does. both sides are right. they are just looking at different numbers, and only one of them is verifiable.

the fix is straightforward and slow: deposit the cash. do it consistently, and let three to four months accumulate so the pattern is visible rather than looking like a one-month spike. underwriters discount sudden jumps for exactly that reason.

the honest caveat is that this is not only a funding decision. depositing cash that was previously staying out of the account changes what your business reports, which affects your tax position, your filings, and your books. that is a real tradeoff and it is not ours to advise on. talk to your accountant before you change how the shop handles cash, and make the decision on the full picture rather than on the funding number alone. for some shops the larger offer is worth it. for others it is not.

the middle path some owners take is to start depositing consistently now without expecting it to change anything this month, and to treat the improved number as something that arrives next quarter.

the second number that matters more

everything above answers “how much can i get.” the more useful question is “how much can i carry,” and those two answers are not the same. the largest amount available is often not the right amount to take.

a revenue-based advance is repaid through automatic daily or weekly debits. that debit does not care what kind of week you had. so the number that decides whether the next six months are workable is not the lump sum that arrives — it is what leaves the account every business day afterward, measured against your worst recent week rather than your best.

the arithmetic that catches people is the term. a larger advance on a shorter remittance window produces a bigger daily payment than a smaller advance on a longer one, and the gap is usually wider than owners expect. two offers can look similar in headline size and be completely different to live with.

so run the test before you decide. take your lowest-deposit week in the last four months, divide it by the business days in that week, and see what fraction of it the daily debit would consume. if it eats a share that leaves nothing for inventory, rent, and payroll in that week, the amount is too large regardless of what was offered.

our mca calculator lets you model any amount, term, and cost against each other and see the daily figure. it is illustration only, it runs in your browser, and nothing it produces is an offer. use it to compare a large-and-short structure against a smaller-and-longer one, and read how an mca works for the mechanics behind the numbers, including holdback and reconciliation.

the practical rule: ask for what the plan needs, not what the file supports. an advance sized to a specific use — an inventory buy, a build-out, a bridge across a slow month — has a repayment story. an advance sized to the maximum available has to invent one.

how to estimate your own range before you talk to anyone

you can do a version of this yourself tonight with four months of statements and ten minutes. it will not produce an offer, but it will get you close enough to stop guessing and to know which questions to ask.

1. pull the last four complete months of business bank statements as bank-issued pdfs. not screenshots, not a summary export. every page.
2. write down total deposits for each month. then subtract anything that was not customer money: transfers from your own accounts, an owner contribution, a refund, a previous advance landing. what is left is your real deposit figure.
3. average the four months, then look at the shape. if the trend is flat or rising, the average is a fair working figure. if it is falling, use the most recent month instead, because that is what underwriting will do.
4. count deposit days per month. twenty or more says a business operating daily. under ten says lumpy, and lumpy reads as riskier no matter what the total is.
5. count nsfs and negative-balance days across all four months. zero is strong. a handful is workable with an explanation. a recurring pattern is the thing to fix before you submit anything.
6. find every existing debit that repeats on a daily or weekly schedule, and add up the monthly total. subtract it from your working figure. what remains is the room a new provider is actually sizing against.
7. check your time in business against the account's opening date, not the day you had the idea. under six months, revenue-based funding is generally not available yet.
8. set the payment ceiling. take your lowest deposit week, decide what daily amount you could give up in that week without missing rent or an inventory order, and treat that as the cap. size the advance to that payment, not the other way around.

run that and you will have three useful things: a defensible deposit figure, a short list of what is holding the number down, and a payment you can live with. that is a far better position than walking into a call with a number you hope to hear.

one last thing on what to distrust. any specific amount quoted to you before someone has read those statements is a sales figure, not an underwriting figure. the same goes for “guaranteed approval” and any promise of a number attached to a form you have not filled out yet. real sizing follows the file.

for the record: mellow is not a lender. we review your details and work to connect you with providers that serve your category. approval and terms rest with the provider, subject to underwriting. we do not set amounts, we do not underwrite, and we would rather tell you the number is not there yet than move a file that should wait a quarter.

keep reading

• reading your bank statements — grade your own file the way an underwriter will
• mca calculator — model amount, term, and daily payment against each other
• how an mca works — holdback, remittance, and reconciliation mechanics
• how fast can you get funded — the real timeline, stage by stage
• stacked positions — what happens when a second advance is on the table
• business funding with bad credit — what credit changes and what it does not
• mca glossary — plain-english definitions of the terms on this page