What a funding partner reads in your bank statements

A funding partner reading your statements is asking one thing: can the money that comes in carry the money that would go out, and does the account show it? Everything else is detail. So read your own statements first, the way a partner will, and you will know what they say before anyone else does. In my read, that reading happens in five passes, in this order:

1. The name on the account, and the months the statements cover.
2. The deposits: which ones count, and their rhythm.
3. The balance: the low point, the negative days, the returned items.
4. The outflows that tell a story, especially a debit that is the same every day.
5. The one line that decides the read in your trade.

Whose name is on the account, and how many months it covers

Before a single deposit gets read, two things get checked. Is this a business account in the legal name of the business that is asking, and how much of the year is in front of the reader?

The name matters because a partner can only read a business it can find. Statements in your own name, or in a trading name that does not match the entity on the request, put the file on hold while somebody asks which business this is. If the money still lands in personal checking, that is the problem to fix before any other, and the EIN guide covers how to open the account that fixes it.

The months matter because a statement is a photograph of a season. How many months a partner asks for is the partner's call and varies with the size of the request; what I can say is that a longer run helps any business with a busy season and a quiet one, because three months can be all busy or all quiet. A shop whose statements start in June is a different business from the same shop's full year, and a debit sized off three summer months is sized for a shop that will not exist in October. The HVAC season guide works that through month by month; the principle holds in every trade with a calendar.

Which deposits count

The deposits are the revenue, and the first thing a reader does is decide which lines are revenue. Customer payments, card settlements, platform payouts and checks from people you did work for count. Three things that look identical on the page do not: a transfer from another account of your own, the proceeds of a loan or an advance, and money you put in yourself. To take one figure, a $10,000 customer payment and a $10,000 transfer from savings are the same line until somebody explains them, and an unexplained large deposit is usually set aside rather than counted, because the reader has no way to know it will come again.

Then the rhythm. A reader looks at how many days in the month carry a deposit and how long the gaps are. A trade paid at the door shows deposits most working days; a trade paid on invoices shows a few large ones with quiet weeks between. Neither is wrong. What hurts is a rhythm that does not match the business you describe, or a business split across accounts so that each one looks smaller than the whole. If the field techs take card payments on an app that settles to a personal account, the business account is telling half the story, and half is what gets read.

One more thing about the total. A partner sizes what it offers off what it can see, and in my read a fixed daily or weekly debit is set off the average of the months in front of it. So a month that is not going to repeat, a windfall, a one-off contract, a freeze week, pushes the average up and the debit with it, and the debit then has to clear in the months that are ordinary. Say which months are not ordinary before they get averaged.

Your lowest balance, negative days and bounced payments

A negative day is a day the account closed below zero. A returned item is a payment that bounced because the money was not there. Both are on the statement in plain sight, and both are what a reader looks for once the deposits are counted, because a new debit has to clear on the worst day of the month, not the average one.

Find them yourself. Run down the daily balance column and mark every day it went below zero; then look for the bank's own fees, which name themselves: overdraft, returned item, insufficient funds. Count them across every month you are sending. A partner does the same thing, and in my read the count matters more than the amounts, because each one is a day the account could not cover what was already scheduled.

The low point matters too, even when it stays above zero. A business that ends most months comfortably but dips to a few hundred dollars on the 14th, when payroll and the truck payment land together, has told the reader exactly which day a daily debit would fail. That is not a reason to hide the dip. It is the number to test any quote against: if the debit would not have cleared on your lowest day last month, the amount is wrong or the term is, and the advance guide shows how to run that test.

The payments going out that stand out

The withdrawals get read after the deposits, and a few kinds get read closely.

An existing advance shows on a statement as the same dollar amount leaving every banking day, or the same amount every week, to a name that is not a supplier. That is the line a partner looks for first, because a second advance on top of a first is stacking: two fixed debits out of one account, each sized as though the other did not exist. Many contracts forbid it, and in my read it is the largest single risk on the page. If you have one, name it: the funder, what it takes out, and when it ends. It will be found either way.

The rest are ordinary and worth naming anyway. A weekly ACH to a lender for the van or the lift. A supply-house or parts-distributor account settling on the 10th, which is not a lender debit but is a scheduled outflow every month. Payroll leaving the same account the revenue lands in, which is a good sign, against labour paid as contractor payments, which reads differently and is worth a sentence. A rent or lease that lands on the 1st. And the thing that does not show at all: materials bought on a personal card, which leaves the account looking cleaner than the business is and the margin looking better than it is. A reader would rather see the outflow and understand it.

What the deposits look like in your trade

The five passes are the same for every business. What changes by trade is which line decides the read: the one thing on the page that, unexplained, makes a good file look like a problem, and explained, makes it look like exactly the business it is. From the thirteen trades this site is written for:

Illustrations of what a reader looks for, drawn from how each trade gets paid; none is a rule any partner has published, and every partner sets its own criteria. The row to read is your own, and the sentence in the last column is the one to write before anyone asks.

The one-page note to send with them

Statements go out with a page in front of them. Not a plea and not a business plan: a reader's guide to your own account, half a page, that names what the reader would otherwise have to guess. It says:

• The account, the bank, and the legal name of the entity, matching the request.
• The months covered, and which of them were not ordinary, and why.
• Every large or odd deposit, named: which customer, which administrator, which lender, or which of your own accounts it came from.
• The recurring outflows, named: the van, the lift, the supply house, the rent, the payroll run.
• Any existing advance or line: who, what it takes out each week, and when it ends.
• Anything the trade table says about your trade, in one sentence.

A file where the biggest deposits are accounted for reads differently from one where they are a surprise. Explaining is not pleading; it is doing the reader's first hour for them, and it is the one part of the read you control. It does not change what the account shows. If the account shows negative days every month, the honest move is a few months of cleaner statements before you ask, not a better page in front of the same ones.

Where this fits with our request form

None of this is asked for on this site's form. The form takes about two minutes, asks for bands rather than figures, and I do not run credit on it. Statements go from you to a funding partner, later, when a partner asks for them, and the partner reads them the way this page describes, in its own order and against its own criteria, which nobody has told me. Partners underwrite and decide. What this page can do is make sure that, when the statements go, you have already read them.