Why ecommerce is a special case for MCA underwriting
A traditional brick-and-mortar MCA looks at three things: business bank deposits, credit-card terminal volume, and average ticket size. The lender sees an established physical revenue trail and prices accordingly. An ecommerce business does not have a physical terminal. The revenue flows through Shopify Payments, Stripe, PayPal, Amazon Marketplace settlements, or whichever processor the seller uses, and lands in the business bank account as a daily or weekly batched deposit.
Modern MCA lenders have built underwriting models specifically for this. They either integrate with the platform via API or use a temporary read-only login to pull the sales data directly. What they look at is different from terminal MCA underwriting: monthly gross sales trend, average order value, refund and chargeback rate, customer repeat-purchase percentage, and platform concentration risk. The lender wants to see consistent revenue with manageable refund rates, not just topline volume.
The platforms we work with
Shopify
Lenders read settlement deposits and pull sales data via the Shopify API. Sellers using Shopify Payments are the cleanest to underwrite. Shopify Capital is the native option; outside MCAs can beat it on amount if you have multi-channel revenue.
Stripe
Most flexible for online sellers. MCA lenders pull from Stripe via API. Strong for SaaS, marketplaces, and DTC brands using custom checkout. Lower refund rates and recurring revenue improve offers significantly.
Amazon
Amazon Lending offers its own MCA-style product through Parafin. Outside MCAs can fund off Amazon settlement deposits showing in your business bank account. Total online revenue across Amazon plus other channels increases approval amount.
WooCommerce
Self-hosted WooCommerce paired with Stripe or PayPal funds well. Lender reads payment-processor data, not WooCommerce itself. WordPress hosting plus a real domain age is a plus.
BigCommerce / Magento
Mid-market platforms. Funds the same way as Shopify or WooCommerce: through the connected processor. Larger sellers ($100K+/mo) often qualify for revenue-based financing alongside or instead of MCA.
Etsy / eBay
Marketplace sellers fund off settlement deposits to the business bank. Lower volumes than Shopify/Amazon sellers but specialty lenders cover Etsy artisans and eBay top-rated sellers at competitive factor rates.
What ecommerce-specific lenders look at
- Trailing 6-month gross sales. Floor is roughly $10K/mo. Sweet spot $30K+/mo. Best offers open at $75K+/mo.
- Year-over-year growth. Flat-to-growing is healthy. Declining (down 20%+ YoY) downgrades the offer or disqualifies.
- Refund and chargeback rate. Under 2 percent is healthy. Above 5 percent is a red flag (signals product quality or fulfillment issues).
- Platform concentration. 100 percent of revenue from a single platform is risky in the lender's view (platform suspension = no revenue = no repayment). Multi-channel sellers get better terms.
- Repeat customer percentage. 30 percent or higher signals brand strength and predictable future revenue.
- Average order value (AOV) trend. Stable or rising AOV is good. Falling AOV with rising volume can signal margin compression.
- Personal FICO. 500+ workable, 650+ for the best factor rates. Less weighted than for term loans because revenue data is doing more of the work.
Typical amounts and factor rates for ecommerce MCAs
Advances usually fund at 75 to 150 percent of monthly gross sales. Some lenders go higher (200 percent) for sellers with multi-year clean data and strong margins. Factor rates run 1.20 to 1.42, with 1.25 to 1.35 most common for established ecommerce files. Terms are usually 6 to 18 months. Repayment is either fixed daily/weekly ACH or, for some lenders, a percentage of new daily sales (a true split-funding model where the lender takes 10 to 15 percent of every order until the payback is collected).
Ecommerce sellers often get better factor rates than brick-and-mortar at the same revenue level because the data is cleaner (no cash handling, no skimming exposure, machine-readable platform data). A $60K/mo Shopify seller with 24 months of history and 3 percent refund rate may see 1.27 factor; a $60K/mo restaurant at the same revenue may see 1.38.
When ecommerce should NOT take an MCA
- Revenue is declining. The daily debit will compound the cash flow problem and you'll be back stacking within 90 days. Fix the revenue issue first.
- You have SaaS or recurring subscription revenue. A line of credit at 15-20% APR is dramatically cheaper than an MCA factor rate, and recurring revenue is exactly what LOC lenders want to see.
- Use of funds has a 12+ month payback. New product line development, major site overhaul, brand campaign, hiring a team. Match the financing term to the payback horizon. A term loan or RBF fits these better.
- Margins are under 15 percent. MCA cost will eat the margin on whatever you spend the money on. Best fit is when you can demonstrate the use produces 2-3x the MCA cost in additional revenue.
When an ecommerce MCA actually makes sense
- Inventory load before a known peak. Q4 stock-up for a holiday brand. The advance funds inventory, the inventory sells through, the daily debit gets covered by the new revenue.
- Paid-ad campaign with proven unit economics. You know your CAC and LTV. The MCA funds the spend, the spend acquires customers, the contribution margin covers the daily debit and clears the payback in months.
- Bridge financing during a platform suspension or chargeback dispute. Short-term capital to cover operating costs while a temporary issue resolves.
- Opportunity buy on inventory at a discount. A supplier offers terms you cannot pass up but you need cash this week. The discount you capture covers the MCA cost and then some.
If you are unsure which scenario you are in, the honest answer comes from looking at your unit economics. Submit your last 6 months of platform reports and bank statements; we will tell you in 2 hours whether an MCA fits your numbers or whether a different product makes more sense. See all 7 funding options compared for the full menu.