Negative Day Count
Negative day count is the underwriting metric counting days the merchant's business bank account had negative balance during the trailing 3-6 months — a key risk signal that often disqualifies merchants from standard MCA programs or forces specialty high-risk pricing.
Why This Matters
Negative day count signals cash flow stress. Most mainstream MCA funders cap acceptable negative days at 3-7 per month — exceeding this threshold typically results in decline or specialty-program-only pricing with elevated factor rates (1.40+). The metric is a simple proxy for cash management discipline and existing financial stress: merchants frequently going negative typically struggle to absorb additional debit obligations like MCA holdback or ACH split. Bank statement analysis tools (Plaid-linked, third-party OCR) automate negative day counting for high-velocity underwriting workflows.
Frequently Asked Questions
Frequently Asked Questions
How many negative days disqualify a merchant from MCA?
Most mainstream programs cap at 3-7 negative days per month over the trailing 3 months. Beyond 10 negative days/month, decline rates approach 100% in mainstream programs. Specialty high-risk funders may accept 10-15 negative days at premium pricing.
What other red flags appear in MCA bank statement underwriting?
Multiple existing MCA debits (stacking risk), declining revenue trend (slowing business), large unexplained transfers (potential fund concealment), low ending balances (cash management stress), and high frequency of overdraft fees or NSFs.