Funding Products Explained
What is an MCA
A Merchant Cash Advance (MCA) is not a traditional loan — it’s an advance on a business’s future receivables. In short, the lender gives the business a lump sum of capital in exchange for a portion of its future revenue, typically repaid via daily, weekly, and sometimes bi – weekly/ monthly ACH withdrawals.
MCAs are popular because they fund quickly (often within 12–48 hours), require minimal documentation, and are available to businesses with challenged credit.
- Fast approvals and funding
- Low documentation
- Available to low credit or high-risk industries
- Higher cost of capital (factor rates)
- Daily/weekly repayment can strain cash flow
A trucking company doing $35K/month that needs $20K fast to repair a fleet vehicle — and can’t wait 2–3 weeks for a bank loan.
- $5K/month revenue
- 3+ months in business
- 3–4 months of business bank statements
What is a Term Loan
A Term Loan is a traditional-style loan repaid in fixed payments over a set period, typically ranging from 6 months to 5 years. It’s ideal for more established businesses with strong financials that want predictable payments and lower overall costs compared to MCAs.
Pros:
- Predictable monthly payments
- Lower rates than MCAs
- Longer repayment terms
Cons:
- Slower underwriting
- Requires stronger credit and documentation
Ideal Client:
An established dental practice looking to expand into a second location with $150K in working capital.
Minimum Qualifications:
- $25K+ monthly revenue
- 2+ years in business
- 650+ credit score
- Financial statements and tax returns
What is a Line of Credit (LOC)
A Line of Credit (LOC) is revolving credit — similar to a business credit card. The lender approves a set limit (e.g., $50K), and the business draws only what it needs, when it needs it. Repayment is only on the amount drawn.
Pros:
- Only pay for what you use
- Great for recurring needs
- Can be reused once paid down
Cons:
- Often requires good credit
- May have minimum draw amounts
Ideal Clients:
An e-commerce business that needs to buy bulk inventory every quarter but doesn’t want to borrow all at once.
Minimum Qualifications:
- $15K+ monthly revenue
- 1+ year in business
- 620+ credit score
- Clean banking history
Bridge Loans
A Bridge Loan is short-term financing meant to “bridge the gap” between urgent needs and long-term funding. These loans typically last 1–6 months and are used while waiting for other capital (like SBA funds, receivables, or investor money).
Pros:
- Fast access to larger amounts
- Can help secure opportunities or avoid cash crunches
Cons:
- High cost
- Must be repaid quickly
Ideal Clients:
A business that’s waiting on a large contract to pay out in 30 days but needs $100K to cover payroll today.
Minimum Qualifications:
- $50K+ in monthly revenue
- Strong cash flow projections
- Collateral may be required depending on lender
AR Factoring
AR Factoring is when a business sells its unpaid invoices to a lender (factor) at a discount. This allows immediate access to cash while the factor collects on the invoice.
Pros:
- Immediate working capital
- Doesn’t require strong credit
- Based on customer’s ability to pay, not yours
Cons:
- Not suitable if you don’t invoice customers
- Discounted value means you get less upfront
Ideal Clients:
A B2B logistics firm that invoices clients on net-30 terms but needs capital to pay drivers and fuel this week.
Minimum Qualifications:
- Unpaid, verifiable invoices
- B2B customer base
- Clean payment history with customers
Equipment Financing
Equipment Financing is a loan or lease used specifically to purchase business equipment. The equipment itself often serves as the collateral, which makes it easier to qualify than other funding options.
Pros:
- Easier approval if equipment has value
- Spreads cost over time
- Preserves working capital
Cons:
- Can’t be used for general expenses
- May require down payment
Ideal Clients:
A construction company that needs to purchase a $50K backhoe for a large new project.
Minimum Qualifications:
- Equipment quote/invoice
- 3+ months in business
- Credit score requirements vary
Weekly vs. Daily Payback Explained
Repayment frequency can make or break cash flow. Most MCAs and short-term loans are repaid via ACH either daily (Mon–Fri) or weekly.
Daily: Best for businesses with consistent, high-volume sales (e.g., retail, e-commerce).
Weekly: Ideal for businesses with fluctuating or batch revenue (e.g., service-based, seasonal).
Understanding the rhythm of your client’s cash flow will help you guide them to the right offer.
Stacking & How to Refinance
Stacking is when a merchant has multiple active advances or loans.
Refinancing involves buying out an existing position and replacing it with a new deal — often with better terms or additional capital.
Pros of Refinancing:
- Simplifies payments
- May lower daily/weekly burden
- Can unlock additional funding
Risks of Stacking:
- Can damage merchant’s credit
- Higher default risk = fewer approvals
Best Practice:
Refinance when client is performing well and still has 35–50% of balance remaining.
Defaulted Clients: Can They Be Helped?
Yes — some lenders will consider defaulted clients, depending on how long ago the default was, how they’ve recovered, and whether the default was settled or active.
Scenarios that can be worked:
- 6+ months since default
- Debt was settled and paid off
- Strong recent deposits and business growth
Scenarios that usually don’t work:
- Active defaults
- Multiple NSFs
- Ongoing legal issues or charge-offs
When in doubt, get full context and run it by your processor or a closer. There’s often a creative way to help — or at least set the client up for a plan.
Sales Skills, Scripts & Strategy
Objection | Rebuttal |
|---|---|
Who are you? | I’m a syndicate partner at VersaFi — we’re an alternative financing institution based in NYC. We specialize in quick and flexible funding options like term loans, cash advances, and lines of credit. I can have a fully underwritten offer prepared in under an hour. Is there a dollar amount you had in mind? |
| What are your rates? | Everything is based on the strength of your file, so I don’t want to give a generic number. We use factor rates — meaning one fixed cost instead of compounding interest. Rates start around 0.75% monthly and range up depending on risk. The good news: we offer aggressive early payoff discounts too. |
I have bad credit | Fortunately, your credit isn’t a dealbreaker. Our underwriting process is based primarily on your business's performance — monthly revenue, deposits, and consistency. We’ve helped plenty of business owners in the same spot. How much capital would be useful to you right now? |
Just got funded | Got it. Are you fully funded or still looking for additional capital? Depending on how the deal was structured, we might be able to refinance or even stack behind if the cash flow supports it. How much did you receive and with which lender? |
Not interested | Totally understand — quick question though: is that because you don’t need funding right now, or because of the experience you’ve had with lenders in the past? Either way, I can keep it brief and let you decide if it’s worth a second look. |
Bad timing | I hear that. Timing’s everything. But keep in mind — it takes 3–5 minutes to see what we can do, and you don’t have to commit. Let me get an offer prepared now, and if the timing lines up later this week, we’ll already be a step ahead. Sound fair? |
Send me an email | I’m happy to send info over, but truthfully — most of our best deals don’t come from email alone. Let’s take 2–3 minutes to qualify things now, and if it makes sense, I’ll send over an offer that’s worth your time. |
Already working with someone | beat |
How do I know this isn’t a scam? | I get it — the internet is wild these days. VersaFi is a registered brokerage, and we work with some of the top lenders in the country. We don’t charge upfront fees, and our offers are backed by licensed institutions. You’re also free to check our track record anytime. Want me to show you a sample offer? |
I don’t want a daily payment | That’s fair. We actually offer weekly payment structures too, depending on the file. Let’s see what the business qualifies for — worst case, I’ll walk you through both options and let you decide what fits better. |
I need time to think about it | No pressure at all. But while you’re thinking — let’s at least lock in the offer so the terms don’t change. We’re seeing rates adjust daily, so this gives you options without committing to anything. Sound good? |
What’s the catch? | Honestly, there isn’t one. We’re paid by the lender once a deal is funded — you don’t owe anything upfront. Our goal is to secure you the best offer available and help you compare options quickly. If you don’t fund, we don’t make a dime. |
Why do you need my statements? | Honestly, there isn’t one. We’re paid by the lender once a deal is funded — you don’t owe anything upfront. Our goal is to secure you the best offer available and help you compare options quickly. If you don’t fund, we don’t make a dime. |
Why do you need my statements? | Great question — they help us verify revenue and build an offer tailored to your business. Nothing gets shared publicly, and it’s a secure upload process. Think of it like a doctor asking for symptoms before writing a prescription — we just want to get it right. |
I don’t want to take on more debt | Totally get it — and this isn’t traditional debt. Our programs are built around future revenue, and can be structured to give you flexibility without the pressure of fixed loans. Let’s at least see what options are out there. |
Business is slow right now | That’s exactly when most of our clients reach out — to bridge the gap until revenue picks back up. The best time to secure working capital is before things hit a wall. Can I show you a short-term offer to hold you over? |
I don’t want another MCA | Understood. We offer multiple structures — including term loans and lines of credit — that don’t function like traditional MCAs. Let’s see what you qualify for, and we can exclude anything you’re not interested in. |
I’m waiting for an SBA loan | Great — but SBA funding can take weeks or even months. We can get you capital this week to keep things moving while that process plays out. You can always pay us off early if the SBA deal comes through. |
I’ve had a bad experience before | You’re not alone — a lot of our clients come to us after a rough deal elsewhere. Our job is to simplify things, give you options, and get it right this time. I’ll show you how we’re different — deal? |
You guys are all the same | You’re right — most companies out there operate the same way. We don’t. We have access to over 30+ lenders and you don’t pay us unless we get you funded. Let me prove that in 2 minutes — fair enough? |
Can I get 250K with no docs? | I wish it worked like that — but lenders will always need some kind of documentation. The good news? We can get you a pre-approval today with just an app and statements. After that, it’s just a few quick follow-ups. |
Why is the rate so high? | Good question. These programs are designed to move fast and serve businesses banks won’t touch — no tax returns, no waiting 4 weeks. That speed and flexibility comes at a premium. But with early payoffs, it can still be cost-effective. |
How soon do I have to start paying? | Most programs begin repayment within 24–48 hours of funding. That said, some of our lenders offer delayed starts. Let me check your options — we might be able to push your first payment by a few days. |
I need to speak with my partner/spouse | Of course — it’s a big decision. Let’s do this: I’ll put together the numbers so you have something concrete to show them. That way you’re not making a decision — just gathering info. Deal? |
Do I qualify if I’m a sole prop? | Yes — sole props, LLCs, S-Corps, we fund them all. As long as there’s consistent business revenue and an active bank account, we’ve got options. What’s the monthly deposit range you’re seeing right now? |
Cold Openings That Hook
“Straight Shooter” Opener
Script: Hey [NAME], I’ll be upfront — this is a cold call. I’m with VersaFi Capital and we help businesses like yours access quick capital. If it’s a bad time, I get it — but do you have 30 seconds to hear why I called?”
Why it works: Honest, direct, and low-pressure. Builds instant credibility.
“Business-Specific” Opener
Script: “Hi [NAME], I was reviewing some data on [INDUSTRY] companies and saw yours might qualify for a same-day capital program we’re running. I just had a quick question if you’re the right person to speak with?”
Why it works: Feels personalized, makes them curious what they qualify for.
“Money on the Table” Opener
Script: “Hey [NAME], quick one — we just helped a [trucking/retail/etc.] company get $45K funded in 24 hours without tax returns. Just calling to see if I can do the same for you.”
Why it works: Social proof + speed + relevance = attention grabber.
“Not a Bank” Opener
Script: “Hi [NAME], this isn’t a bank call — we’re a performance-based lender, and I think your business might qualify for something faster and easier than what you’re used to. Mind if I explain?”
Why it works: Breaks down walls by distancing you from slow traditional finance.
“Referral Feel” Opener
Script: “Hey [NAME], my name’s [AGENT NAME] with VersaFi — not sure if anyone’s spoken to you yet about the capital program we’re working on for businesses like yours, but I wanted to run something by you quickly.”
Why it works: Makes it feel like a follow-up or intro call — lowers defenses.
“Micro-commitment” Opener
Script: “Hi [NAME], I’ll keep this under 30 seconds. If it doesn’t make sense, you can hang up — fair enough?”
Why it works: Puts control in their hands, builds curiosity. Great for bold closers.
“Conversation Starter” Opener
Script: “Hey [NAME], out of curiosity — if I could get you a funding offer in the next 60 minutes, what would be the first thing you’d use it for?”
Why it works: Dives straight into the need instead of the pitch.
How to Prequalify a Lead on the First Call
Your first conversation with a potential client is crucial. You’re not just introducing VersaFi — you’re gathering the key details that determine whether this lead is fundable. This call should feel casual and consultative, not like a questionnaire. The goal: build rapport while uncovering the facts.
Get the Business Basics
Start with simple, open-ended questions to get them talking:
- “How long have you been in business?”
- “What kind of business do you run?”
- “Where are you located?”
We typically require 6+ months in business and $10k+ in monthly revenue. Get a feel early.
Identify the Revenue Range
You need to know how much money is moving through their business:
- “Roughly what are your monthly gross deposits or sales?”
- “Are you doing most of your transactions via credit card, ACH, or other?”
If they hesitate, offer ranges: “Would you say it’s closer to $10K, $20K, $30K+ per month?”
Ask About Current Financing
This helps with positioning and strategy:
- “Are you currently paying on any existing advances or loans?”
- “Have you received funding in the past?”
Note the lender name, balance remaining, daily/weekly payments, and whether they’re looking to stack or refinance.
Understand the Structure
Clarify how their business is legally set up:
- “Is the business in your name or do you have partners?”
Find Out the Timeline
Gauge urgency and intent:
- “What’s prompting you to look for funding right now?”
- “Ideally, when would you like the funds in your account?”
Soft Qualify Their Credit
Don’t ask their score directly — ease into it:
- “If you had to guess, would you say your credit is excellent, decent, or challenged?”
This helps set expectations for terms without scaring them off.
Green Light to Send App
You can send an application if they meet the following:
- 6+ months in business
- $10K+ in monthly revenue
- Business checking account
- No recent bankruptcies, excessive NSF/negative days, or multiple open positions
- Expressed real intent to get funding within 1-2 weeks
How It All Works Behind the Scenes
Understanding the full workflow at VersaFi helps reps sound sharper, close more deals, and avoid costly mistakes. Below is the complete breakdown — from the moment a lead comes in to post-funding retention.
From Lead to Funded: VersaFi Workflow
1. Lead Generation
Leads come in through marketing campaigns, inbound web forms, or purchased cold data
2. Initial Outreach
Openers contact the lead using our dialer (Augutech), qualify them using the script and intake form, and determine if they’re fundable.
3. Application Sent
Once qualified, an application is sent manually via email or completed over the phone. Submitted apps are uploaded to Centrex.
4. Submission to Lenders
The deal is packaged and sent to underwriting. Depending on the client profile, files may be sent to multiple lenders for competitive offers.
5. Offer(s) Come Back
Lenders return with pre-approvals or approvals. Offers are reviewed internally and then presented to the client.
6. Closing the Deal
A closer walks through the terms, overcomes objections, and drives the file to signature.
7. Funding Process
After contracts are signed, final stipulations (bank verification, interviews, etc.) are collected before the lender wires the funds.
8. Post-Funding Retention
Clients are followed up with regularly to ensure satisfaction and prep for future refinance opportunities.
How Underwriting Works
Underwriting is the lender’s process of risk assessment. They review:
- Revenue consistency (daily/weekly deposit volume)
- Average daily balances and NSFs/negative days
- Existing debt obligations
- Industry type and location
- Bank login verification and document accuracy
The cleaner the bank statements and the more stable the cash flow, the stronger the offer.
What Lenders Look For
Lenders focus on the following factors:
- Time in business (typically 6 months+ minimum)
- Monthly revenue (minimum $10,000+)
- Daily balance consistency
- Low number of NSFs or negative balances
- No recent bankruptcies or unresolved liens/judgments
- Type of business (some industries are higher risk)
The Role of the Openers vs. Closers
- Outreach and initial conversations
- Prequalifying the lead
- Sending applications and gathering docs
- Building the relationship early
- Presenting offers
- Handling objections
- Walking clients through final steps
- Securing signatures and guiding to funding
Collaboration between openers and closers is essential — smooth handoffs = more deals funded.
What Happens After Funding? (Retention Process)
- Clients are placed into a post-funding automation in Go High Level.
- Follow-ups occur every 2 weeks to check in, build trust, and identify refinance opportunities.
- You should keep notes and maintain light contact, especially with fundable clients who may
be ready to come back in 30-60 days.
Red Flags That Can Kill a Deal
- Multiple open advances (stacking)
- Negative balances or frequent NSFs
- Unverifiable business activity
- Clients who avoid submitting documents
- No business checking account
- Inconsistent or falsified documents
- Credit issues: recent bankruptcies, unresolved liens, excessive personal defaults
Why a Client Was Declined – Common Reasons
- Low revenue or inconsistent deposits
- Too many negative bank days
- Unverifiable or cash-heavy businesses
- Existing stacked positions with no paydown plan
- Risky industries or high default rate segments
- Poor responsiveness during stipulation stage
- Red flags in credit or background check
- Incomplete documentation
Basic Lending Terminology Glossary
Term | Who | What | Where | Why | How |
|---|---|---|---|---|---|
Add-on | Lender gives additional funding behind a deal previously originated | An additional infusion of capital | After original deal | Helps with cash flow/expansion | Merchant sends updated statements to justify new deal |
| Advance | Lender issues capital to merchant | The amount given upfront to the merchant | At funding | Provides immediate working capital | Structured with repayment terms |
Application | Merchant submits to lender | Formal request for funding | Before underwriting | Starts the funding process | Must be signed and accompanied by documents |
Asset-Based Loan | Lender uses collateral | Loan secured by an asset (equipment, real estate, etc.) | Underwriting | Reduces lender risk and cost of funds | Requires application, statements |
BV/DL | Final verification team | Bank verification/Decision Logic | After signed contract | Ensures account is active and no new funding | Done through secure 3rd party link |
Balance Owed | Merchant | How much principal is still owed | Throughout term | Used to calculate payoff or renewal options | Displayed in lender portal or payoff letter |
Balance Sheet | Merchant | Shows company’s current assets and liabilities | Internal or bank statement | Helps assess financial health | Often reviewed for high volume clients |
| Buyout | New lender | Paying off other lenders in file | When stacking or refinancing | Allows one lender to hold primary position | Requires payoff letters and approvals |
| COJ | Merchant needs to execute the COJ | Confession of Judgment | Initiated from lender | Mitigates risk of loss. Allows lender to collect judgment quickly if merchant defaults. | Requires wet signature, notarized. NOT DocuSign. |
| CRM | Sales/Processing | Customer Relationship Management tool | Internal system | Tracks status of deals and communication | Example: Monday, |
Clawback | Lender | Commission is rescinded if client defaults within 30 days | Post-funding | Protects lender from early risk | Broker commission reversed |
| Closer | Sales rep | Rep who sells/negotiates deal | After lead is qualified | Responsible for funding the file | Coordinates call, offer review, and docs |
| Collateral | Lender uses asset to secure deal | An asset pledged to lower risk and rates | Deal structure | Helps merchant qualify for better terms | Requires proof of asset and income |
Debt Settlement | 3rd party company | Negotiates on behalf of merchant to lower payment | After payment troubles | Often leads to breach of contract | Not recommended; causes default |
Decision Logic/Plaid | Merchant/lender | Bank verification system | During underwriting | Verifies bank activity, revenue, and NSFs | Requires login via secure link |
Default | Merchant has past non-payment issues | Failure to uphold terms of a previous contract | Reported in funding database | Lender risk flag — can affect future approvals | Often needs full explanation or workaround |
Disbursement | Lender | Funds transferred to merchant | After contracts signed | Completes the funding process | Sent via ACH, wire, or split disbursement |
| EIN | Merchant | Employer Identification Number | Business registration | Used to verify business identity | Required on application |
Factor Rate | Lender determines based on risk | Cost of capital expressed as a multiplier | After underwriting | Represents total repayment amount | Example: 1.35 factor on $10K = $13.5K payback |
Fees | Lender | Costs built into offer | In the contract | Covers underwriting, broker fees, etc. | Itemized or included in payback |
Flex Deal | Lender | Disbursed in increments | At funding | Provides staged capital over time | Ex: $20K funded as $5K/week for 4 weeks |
Full Pack | Merchant | Application + 4 months of statements | Before submission | Minimum docs required to submit a deal | Submit via CRM or email |
Funding Requirements | Merchant | 5K/month revenue + 3 months statements | Before underwriting | Minimum to qualify for basic products | No credit score required |
I.S.O. (ISO) | Independent Sales Org/Broker | Third-party brokerage like VersaFi | Whole process | Helps clients access multiple lenders | Sends deals to lenders for offers |
KPI | Sales team | Key performance indicators | Daily/weekly/monthly | Used to track rep and team performance | Examples: calls, apps, submissions |
Ledger Balance | Merchant | Cash available in business account | Daily | Used to verify repayment ability | Pulled from bank statements or logic |
Line of Credit | Lender provides approved credit limit | Revolving funding line that can be used as needed | Approved at underwriting | Helps manage cash flow with flexibility | Requires application and 4 months of statements |
Merchant Cash Advance (MCA) | Lender gives to merchant based on average revenue | An advance based on business revenue, NOT a loan | Funding stage | Fast capital with minimal paperwork | Requires application and 4 months of bank statements/stips |
Modified Payments | Lender | Changed payment terms | Post-funding | Keeps merchant from defaulting | Set via agreement or internal approval |
Month to Date (MTD) | Lender/Sales | Revenue or activity for the month | Tracking/reporting | Measures performance | Often part of lender approval logic |
Offer | Lender | Funding structure proposal | After underwriting | Outlines terms and amount approved | Reviewed with client by closer |
| Opener | Sales rep | Person who qualifies and warms up lead | Before close | Builds relationship and captures interest | Passes to closer after app |
| PIF | Lender | Paid In Full Balance | Requested before refi or consolidation | Proves current loan is paid off | Used in stacking/buyout logic |
| PSF | Broker (VersaFi) adds to offer | Professional Service Fee | Included in offer | Additional margin for broker revenue | Must be compliant with state and lender |
Point | Broker | 1% of funded amount | In commission | Used to calculate broker revenue | Ex: 10 points on $50K = $5K |
Position | Lender | Merchant’s current loan balance | During underwriting | Used to assess stacking risk | Found in statements |
Processor | Ops team | Handles submissions and files | After close | Ensures clean submission and lender follow-up | Uploads stips and updates CRM |
Refinancing | Lender buys out previous balance | Provides more capital and restructured terms | Funding | Helps merchant expand and improve terms | Requires performance review and balance buyout |
Restricted Industry | Lender | High-risk or blocked industries | At underwriting | Leads to auto-decline or stips | Examples: guns, CBD, finance |
Reverse Consolidation | Lender pays off merchant’s current advances | Consolidation of MCAs into one lower payment | Funding | Helps with cash flow, avoids default | Lender deposits to cover current loans, merchant pays one new amount |
| SBA | Gov/Lender | Small Business Administration loan | External program | Offers low rates, long terms | Strict underwriting, slow turnaround |
| Stacking | Merchant takes multiple advances | Having more than one active position | Reported by lenders | Increases risk of default | Only allowed under specific lender rules |
Stips | Requested by lender | Documents needed to complete funding | After submission | Required to verify and approve funding | Includes ID, statements, app, tax docs, etc. |
Submission | Sales/Processor | Sending full pack to lender | After docs collected | Starts underwriting | Done through CRM or email |
TIB | Merchant | Time in Business | Verified in application | Used to qualify for products | Usually 6+ months minimum |
Tax Guard (8821) | Lender | IRS transcript request via Form 8821 | During stip collection | Verifies merchant is in good standing with IRS | Merchant signs form; lender pulls tax transcripts |
Term Loan | Lender gives to merchant based on criteria | Loan that is more than 1 year | Funding stage | Helps merchant by providing working capital based on business needs | Requires application and 4 months of statements |
| UCC | Merchant gets UCC filed when borrowing funds | Uniform Commercial Code filing that shows merchant owes money | Filed at funding | Shows other lenders the merchant has an obligation | Filed by lender's legal department |
| Underwriter | Lender | Person who reviews deal | After submission | Decides pricing, terms, approval | May ask for more stips |
Upsell | Broker adds to payback amount | Higher payback = higher commission | Before funding | Boosts points and revenue | Must be justifiable by term or value |
| ZBL | Lender | Zero Balance Letter | Before refi or add-on | Proves loan was paid in full | Requested from previous lender |
