Glossary · underwriting

Monthly deposit average

Also called average monthly deposits, monthly banking average, average monthly revenue.

Total deposits into the operating account over the reviewed statement period divided by the number of months, used as the base figure for sizing an advance or line.

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

Deposit-based underwriting starts here. The funder pulls three to twelve months of bank statements, totals the deposits, divides, and sizes an offer as a fraction of the result. Consistency matters as much as level: a business averaging a steady figure will be sized more generously than one averaging the same figure across two enormous months and four empty ones.

Underwriters then adjust the raw total downwards. Commonly stripped out:

  • Transfers between the business's own accounts
  • Proceeds of loans, advances and credit card cash advances
  • Owner injections and related-party deposits
  • Refunds, returned items and reversed entries
  • Large one-off receipts that clearly will not repeat

Where a business runs several accounts, funders generally want all of them, precisely because inter-account movement is the easiest way to double-count.

The adjusted average, not the raw one, sizes the offer - and it also sets the expected receipt level against which any reconciliation request will later be judged.

Where this one catches people

Gross deposits are not revenue, and underwriters have seen every version of the inflated statement. Cycling money between two of your own accounts, depositing an advance, or running card batches through twice raises the raw number and lowers your credibility when the adjustment is made. The adjusted figure is the only one that funds.

Worked through

Illustration. Six months of statements total $840,000 in deposits - a raw average of $140,000. The underwriter removes $90,000 transferred in from a second business account, $60,000 of advance proceeds from a prior funder, and a $30,000 insurance settlement. Adjusted deposits are $660,000, an average of $110,000. An offer sized at a fraction of monthly deposits is therefore built on $110,000, not $140,000 - roughly a fifth smaller than the applicant expected.

Figures in the example are illustrative. They show the arithmetic, not a quote — what any one lender would charge is on that lender's page, where it is published at all.

Where you will meet this term

Merchant Cash Advance Working Capital Business Line of Credit Revenue-Based Financing

Read next

Bank statementsThe months of business checking statements that most non-bank underwriting is actually built on — the primary… Merchant processing statementThe monthly summary from a card processor showing gross card volume, transaction count, fees and net settleme… Negative daysDays within a statement period on which the operating account closed with a negative balance, counted per mon… Percentage of receivablesThe share of the business's receipts a funder has bought and is entitled to collect - the operative obligatio… Qualification criteriaThe published floors a funder applies before a file is properly reviewed - time in business, monthly revenue,…

Monthly deposit average — common questions

What does monthly deposit average mean?

Total deposits into the operating account over the reviewed statement period divided by the number of months, used as the base figure for sizing an advance or line.

Where does monthly deposit average catch people out?

Gross deposits are not revenue, and underwriters have seen every version of the inflated statement. Cycling money between two of your own accounts, depositing an advance, or running card batches through twice raises the raw number and lowers your credibility when the adjustment is made. The adjusted figure is the only one that funds.

Is monthly deposit average the same as an interest rate?

Monthly deposit average 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 monthly deposit average apply to?

Merchant Cash Advance, Working Capital, Business Line of Credit, Revenue-Based Financing.

Is there a worked example of monthly deposit average?

Yes, on this page, and it is labelled illustrative. It shows the arithmetic, not a quote from any lender.

What else should I read alongside monthly deposit average?

Bank statements, Merchant processing statement, Negative days, Percentage of receivables, Qualification criteria.

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.