By Stefan Idriceanu, Co-founder
True Revenue in MCA Underwriting: What Gets Netted Out and Why It Must Be Visible
True revenue is the money a merchant actually earns from customers, after removing deposits that are not sales. On an MCA file that means netting out transfers, MCA fundings, owner infusions, reversal credits and returned deposits, and showing each removed amount so the underwriter can check it.
Last updated: 2 October 2026
Why total deposits are the wrong number
Every MCA offer is sized off revenue. The advance amount, the holdback or daily ACH, and the factor rate all assume the merchant's sales will keep flowing at roughly the level on the statements.
Total deposits overstate that level almost every time. A merchant who moves $20,000 from savings into operating, takes a $30,000 advance from another funder and has two customer payments bounce will show a deposit line that looks healthy and is not.
Sizing an offer on gross deposits produces two failures. The first is over-funding: a daily payment the business cannot carry. The second is worse for the funder: the "revenue" that justified the advance included the proceeds of another advance, which is exactly the stacking pattern the funder was trying to avoid.
The five categories to net out
These are the categories most funders remove when they scrub bank statements. Your credit policy may add others, but these five come up on nearly every file.
1. Transfers between accounts. Money moved from the merchant's savings, another operating account or a related entity. It is the merchant's own cash changing pockets, not a sale. Look for "online transfer from", matching account numbers, and round amounts that mirror a debit in another statement.
2. MCA and loan fundings. Proceeds from another funder or lender. These are usually large, single credits, often followed within days by a new daily or weekly debit. Removing them from revenue matters, and recording them matters too, because they are evidence of a position.
3. Owner infusions. The owner putting personal money into the business, often to cover payroll or to make a statement look stronger before applying. Descriptions like "deposit from [owner name]" or a personal-account transfer are the usual clues.
4. Reversal credits. A debit that was charged and then reversed, such as a disputed fee or a returned ACH payment coming back to the account. The money was never revenue; it is a correction.
5. Returned deposits. A customer check or payment that was deposited and then bounced. If the credit stays in revenue and the chargeback is treated as an expense, revenue is overstated by the full amount.
A worked example
The figures below are hypothetical, for example only. They show one month for an illustrative auto repair shop.
| Line | Amount |
|---|---|
| Total deposits | $118,400 |
| Transfers from savings | −$15,000 |
| MCA funding from another funder | −$25,000 |
| Owner infusion | −$6,000 |
| Reversal credits | −$1,150 |
| Returned deposits | −$2,250 |
| True revenue | $69,000 |
On total deposits, the shop looks like a $118K-a-month business. On true revenue, it is a $69K-a-month business with an existing position that was funded this month.
If the funder's box allows a daily payment up to a set percentage of monthly revenue, the gap between those two figures is the gap between a sustainable offer and a default.
Now repeat that exercise for every month on the file. A merchant with steady true revenue and one unusual infusion is a very different risk from a merchant whose revenue only looks steady because of infusions every month.
Why the netted amounts must stay visible
It is tempting to reduce true revenue to a single number on a scorecard. That is convenient and it is not enough. A single figure hides three things an underwriter needs.
- Classification errors. A large customer payment that arrived by wire can be misread as a transfer. If only the net figure is shown, nobody catches the understated revenue, and the funder declines a good merchant.
- Patterns across months. Owner infusions that repeat every month are a signal of cash-flow stress. That signal disappears if infusions are silently removed.
- Defensibility. When a senior underwriter, a syndication partner or a committee asks why the offer was sized at a given amount, "the tool said $69K" is not an answer. "Here is the $118K, and here is each item we removed" is.
A good true revenue view shows, per month: gross deposits, each netted category with its amount, the resulting true revenue, and a click-through from any category to the transactions inside it.
A checklist for scrubbing true revenue
Use this whether you scrub by hand, in a spreadsheet or in software.
- Confirm the statement balances first: beginning balance plus credits minus debits should equal the ending balance. If it does not, the extraction or the document is wrong.
- Check that every statement month in the lookback period is present before averaging anything.
- Net out the five categories above, per month, and keep each category's total.
- Link each removed credit to its source transaction and page.
- Flag any MCA or loan funding as a potential position, not just a revenue adjustment.
- Look at the trend of each netted category, not just the average true revenue.
- Record the true revenue figure that was used to size the offer, with the date it was calculated.
How DueDeal handles it
DueDeal calculates true revenue per month and keeps the working visible.
- Reconciled before it is scored. Every bank statement is reconciled to the cent by rebuilding the balance from its transactions and comparing it with the beginning and ending balance.
- Netted amounts shown by category. Transfers, MCA fundings, owner infusions, reversal credits and returned deposits are each shown with their amounts, month by month, next to true revenue.
- Traceable to the page. Every transaction keeps its source page, so an underwriter can open the exact line behind a netted amount.
- Fundings feed the positions view. Detected MCA positions are linked to their supporting credits and debits, so the funding credit behind a position can sit in the stacking evidence as well as in the netted revenue.
- Missing months become a gate. A gap in statement months is detected automatically and raised as a "statements needed" gate, so the underwriter sees the gap before trusting any average.
The same deal record then carries the offer, the contract and servicing, which is the broader point in detection is not resolution.
See it on your own statements
Run a parallel pilot: keep your current tools, give DueDeal 20 deals, and compare the true revenue workings side by side. Or book a demo and bring a file your team argued about.
Frequently asked questions
What is true revenue in MCA underwriting? True revenue is the portion of a merchant's bank deposits that comes from actual sales. It excludes transfers between accounts, MCA or loan fundings, owner infusions, reversal credits and returned deposits.
How do you calculate true revenue from bank statements? Start with total deposits for each month, then subtract transfers, MCA and loan fundings, owner infusions, reversal credits and returned deposits. Keep each subtracted category visible so the result can be checked.
Why are MCA fundings removed from true revenue? MCA fundings are borrowed money, not sales, so leaving them in revenue overstates the merchant's capacity to pay. A funding credit is also evidence of an existing position that affects stacking risk.
Should owner infusions count as revenue? Owner infusions should not count as revenue because they come from the owner, not customers. Repeated infusions across several months can also indicate cash-flow stress worth reviewing.
What is the difference between average deposits and true revenue? Average deposits include every credit to the account. True revenue removes non-sales credits, so it is usually lower and a more reliable basis for sizing an advance and its payment.
Does DueDeal show how true revenue was calculated? Yes. DueDeal shows true revenue per month alongside the netted amounts for transfers, MCA fundings, owner infusions, reversal credits and returned deposits, with each transaction linked to its source page.