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Credit box
Also called credit criteria, buy box, guidelines.
The set of parameters defining which files a funder will approve, covering time in business, revenue, credit, industry, state, position and account behavior.
Drafted with AI assistance. Not yet independently checked. Nobody has verified the claims on this page against a source, so treat the figures and legal points as a starting point rather than as settled, and confirm anything you are about to act on. How we check things.
What it means
Every funder publishes a box to its brokers, formally or informally. Typical parameters: minimum time in business, minimum monthly revenue or deposits, minimum deposit count, minimum average daily balance, maximum negative days and NSFs per month, minimum personal credit score, acceptable positions, restricted industries, restricted states, and open judgments, liens or bankruptcy history.
Restricted industry lists are longer than most owners expect. Common exclusions include law firms, cannabis-related businesses, adult entertainment, firearms dealers, crypto trading, non-profits, insurance and finance intermediaries, auto dealers, travel agencies and businesses with long-dated customer prepayments, each for its own reason, from federal banking risk to chargeback exposure to receivables that are not really receivables.
State restrictions come from licensing and enforcement exposure rather than from credit. A funder may decline a strong California or New York file for reasons that have nothing to do with the business.
The box explains what looks arbitrary from the outside. The same file can be declined by six funders and approved by the seventh at a good price because it happens to sit inside that one's parameters. It also explains why the broker's real value is knowing the boxes, and why sending a file everywhere is a substitute for knowing them.
Where this one catches people
Being outside a box is not the same as being uncreditworthy, and being inside one is not evidence the funding is suitable. Merchants declined by one funder frequently accept much worse pricing from the next on the assumption that the market has judged them, when the difference was an industry code or a state.
Where you will meet this term
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Credit box — common questions
What does credit box mean?
The set of parameters defining which files a funder will approve, covering time in business, revenue, credit, industry, state, position and account behavior.
Where does credit box catch people out?
Being outside a box is not the same as being uncreditworthy, and being inside one is not evidence the funding is suitable. Merchants declined by one funder frequently accept much worse pricing from the next on the assumption that the market has judged them, when the difference was an industry code or a state.
Is credit box the same as an interest rate?
Credit box is defined above; if you are comparing it against a rate, check whether the two measures share a time dimension before you put them side by side.
Which products does credit box apply to?
Merchant Cash Advance, Working Capital, Business Line of Credit, Equipment Financing, Revenue-Based Financing.
Is there a worked example of credit box?
Not on this entry. Where a term is arithmetic, the arithmetic is shown; this one is not primarily a calculation.
What else should I read alongside credit box?
Approval, Automated underwriting, Average daily balance, Credit committee, Position.
Has this definition been checked?
Not yet. This entry is drafted and live, and the notice at the top says so. Confirm anything you are about to act on.
Is this legal advice?
No. It is a definition. What a clause does in your contract, in your state, is a question for a lawyer licensed where you are.
Can I suggest a term?
Yes — [email protected]. The glossary grows from what people are actually shown in contracts.