As the business landscape continues to evolve, brokers are playing an increasingly crucial role in helping small businesses access the capital they need to grow. Merchant Cash Advances (MCA) provide a flexible funding solution for many entrepreneurs who need quick access to working capital. However, the process of successfully submitting MCA deals requires a solid understanding of the industry and its ever-changing landscape. Brokers need to stay ahead of evolving expectations, submission guidelines, and underwriting standards that are critical in the deal-making process. As we step into 2025, the rules of the game have shifted, and it’s important for brokers—whether seasoned or new—to understand these changes to remain competitive.
This comprehensive guide outlines what brokers need to know about submitting MCA deals in 2025, helping you navigate the complexities of deal submission, packaging, underwriting, and more to ensure success.
1. The Importance of Thorough Deal Packaging
One of the most important factors in securing successful MCA deals is how well the deal is packaged. Deal packaging refers to providing all the necessary documentation and supporting information that lenders need to assess a business’s financial health and determine eligibility for funding. In 2025, deal packaging standards have become more rigorous, and brokers must pay close attention to every detail. A disorganized or incomplete package can lead to unnecessary delays or, worse, rejection of the deal. On the other hand, a well-packaged deal can streamline the approval process, getting your clients the capital they need faster.
Key Documentation Required:
● Business Tax Returns: Most lenders require at least three years’ worth of tax returns to assess a business’s financial health and tax compliance.
● Bank Statements: A minimum of 3-6 months of bank statements to show cash flow patterns.
● Profit and Loss (P&L) Statements: A snapshot of the business’s income and expenses, which is vital for assessing profitability.
● Business License or Articles of Incorporation: Proof that the business is legitimate and legally registered.
● Personal Identification for Business Owner(s): Lenders often request personal identification to verify the identity of business owners.
Example: Imagine submitting an MCA deal for a small restaurant that is looking to expand. If you fail to include the last three months of bank statements or miss the latest P&L statement, it could significantly delay the approval process. On the flip side, a well-organized deal with all the required documents will allow the lender to assess the business quickly, speeding up the decision-making process.
Tip: Double-check that all documents are up to date and accessible. The faster you can submit a complete package, the quicker your client will see results. It’s also worth noting that some lenders might require additional documentation depending on the industry or specific business situation. For instance, if the business has recently signed a major contract or secured a new revenue stream, including this information in the package can help demonstrate growth and stability.
2. Understanding MCA Underwriting Expectations
Underwriting is the process that lenders use to evaluate the risk of lending to a business. In 2025, lenders are placing increasing emphasis on specific factors to determine whether or not they will approve an MCA deal. Understanding these underwriting expectations is critical for brokers to help clients prepare for the evaluation process.
Key Underwriting Factors in 2025
● Revenue Consistency: Lenders prefer businesses that show stable, reliable revenue streams. A consistent cash flow makes the business appear less risky, and lenders are more likely to approve funding if the business has predictable income.
● Business Health: Besides revenue, other aspects of the business’s financial health, such as debt levels, profitability, and business longevity, are closely scrutinized. Lenders prefer businesses with solid foundations that are well-positioned for sustained success.
● Owner’s Credit History: While MCA deals are more lenient when it comes to personal credit, a business owner with a positive credit history can still improve the chances of approval. Even if the business owner’s personal credit is less than perfect, lenders will still consider it as part of the overall assessment.
● Industry Risk: Different sectors carry varying degrees of risk. High-seasonality industries or those with fluctuating customer demand may face more scrutiny
from lenders. Brokers should be prepared to explain how the business manages these risks and maintain transparency throughout the process.
Example: Let’s say you’re submitting an MCA deal for an eCommerce company that experiences fluctuating sales due to seasonal trends. The company’s sales drop significantly during the off-season, and this is reflected in their tax returns. Highlighting this pattern during the underwriting process—and providing strategies on how the business plans to improve cash flow during slow periods—can help lenders understand the situation and may improve the chances of approval.
Tip: Pre-qualifying your client is an excellent way to assess whether their financials align with lenders’ requirements. By analyzing their revenue trends, creditworthiness, and potential industry risk, you can help identify red flags early, avoiding unnecessary rejections.
3. Broker Onboarding Process in 2025
Before submitting MCA deals, brokers must undergo an onboarding process with their funding partner. This step ensures that brokers are familiar with the lender’s specific submission guidelines, deal structures, and communication expectations. It’s a crucial part of the process, particularly for brokers handling complex or high-stakes deals.
What Broker Onboarding Includes:
● Training: Brokers are trained on the latest underwriting guidelines, industry trends, and best practices, allowing them to stay ahead of the curve.
● Platform Access: Brokers gain access to the funding partner’s deal submission platform, which allows for easy document upload, deal tracking, and communication with underwriting teams. This streamlined process can save brokers time and improve the client experience.
● Broker Resources: Onboarding also provides brokers with valuable resources, such as marketing materials, commission structures, deal structuring guides, and client support tools.
Example: After completing the onboarding process, a broker working on a deal for a local gym will be well-versed in the specific documents required and how to communicate effectively with the underwriting team. As a result, the deal is submitted efficiently, and the broker can update the client in real time, minimizing delays and confusion.
Tip: Fully utilize the resources provided during onboarding to build strong relationships with your clients. Brokers who take the time to understand the submission process and leverage available tools are more likely to close deals successfully and build long-term, trust-based relationships with clients.
4. Clear Communication and Timely Submissions
In 2025, effective communication is crucial for maintaining a smooth deal progression. Brokers must maintain open, proactive, and consistent communication to avoid misunderstandings and ensure that all parties are aligned throughout the process. Transparent communication helps prevent delays and ensures that lenders have a clear understanding of the business’s situation, making the approval process much more efficient.
Brokers should go beyond just relaying information and focus on fostering an open dialogue. This means actively engaging with both clients and lenders, promptly addressing any concerns or changes, and keeping all parties updated on the deal’s status. Regular communication helps build trust and ensures that issues are resolved swiftly, minimizing the risk of disruptions in the deal process.
Key Communication Practices:
● Regular Updates: Keeping lenders informed about any new developments, such as a change in a client’s financial situation, helps ensure that the deal proceeds without unnecessary delays.
● Follow-Up: After submitting a deal, brokers should follow up regularly to confirm that the deal is moving forward and to address any questions or concerns from the lender’s side.
● Accuracy: Providing accurate and complete information is essential. Inaccurate or misleading details can result in delays, or worse, the rejection of the deal.
Example: Suppose you’re working on an MCA deal for a small retail store that’s expanding. During the submission process, the business experiences a sudden dip in sales due to an unexpected event. By proactively updating the lender with this information, you can help the lender understand the situation and may be able to negotiate more favorable terms to keep the deal on track.
Tip: Stay organized by using CRM tools to track your submissions and keep communication clear and consistent. This will help you stay on top of deadlines, manage expectations, and ensure a smooth process for both you and your clients.
5. Preparing for the Changing MCA Landscape in 2025
The MCA industry is continually evolving, shaped by emerging trends, innovae tivapproaches, and changing regulatory landscapes that influence its growth. In 2025, stricter regulations on lending practices may alter loan terms, interest rates, and fees. As a broker, staying informed about these developments is critical for maintaining a competitive edge and ensuring compliance with the latest standards.
Example: If new regulations limit the maximum loan amount for certain businesses, brokers will need to adjust their approach to structuring deals accordingly, ensuring that their submissions align with the latest industry standards. This could require altering deal structures or advising clients to adjust their funding requests.
Tip: Regularly review industry news, attend webinars, and maintain open lines of communication with your underwriting team. Being proactive in staying informed about new regulations will help you adapt quickly to the evolving market.
Final Thoughts
In 2025, submitting MCA deals requires brokers to be well-organized, knowledgeable, and proactive. By understanding the deal packaging process, underwriting expectations, and the importance of clear communication, brokers can greatly improve their chances of successful deal submissions. With the right tools, training, and resources, brokers can thrive in the fast-moving MCA industry and build lasting relationships with clients.
