Why “3 Months of Bank Statements” Is a Red Flag in Business Financing

When business owners approach the market for financing, one of the first things they encounter is the request for documentation. At face value, the process seems straightforward: submit bank statements, and receive an offer. But the number of statements requested reveals far more than most realize.

If a broker or funding company asks for only three months of bank statements, it is often an indicator that you are not being evaluated for true institutional lending products. Instead, you are likely being steered toward a Merchant Cash Advance (MCA) — a short-term, high-cost product that is based almost exclusively on recent deposits.

Why This Matters

Business owners deserve clarity about the tradeoffs:

• MCAs are designed for speed, not sustainability. They require minimal documentation, fund quickly, and carry some of the highest effective costs in the market.

• Institutional-grade products require more depth. Business Term Loans, Business Lines of Credit, and other structured financing tools demand a more comprehensive underwriting review — often six to twelve months of statements, financials, and tax documentation. This process takes more time and effort, but the payoff is significant: lower rates, longer terms, and real working capital stability.

The "Broker’s" Incentive

Why do many brokers prefer the “3 months only” approach? The answer is simple: MCAs are easy to package and produce higher commissions in the short term. The tradeoff is pushed onto the business owner, who inherits expensive debt and limited flexibility.

The Higher Standard

At Fidelus Private Equity Group, we are committed to the discipline of full underwriting. That means:

• Taking the time to review the complete financial picture

• Positioning businesses for the highest-quality products available

• Delivering capital solutions that support long-term growth, not short-term survival

Quality capital requires more than shortcuts. It requires a process. Business owners who recognize this distinction put themselves in position for stronger approvals, larger lines, and sustainable terms.