Customer concentration
Concentration is not a decline by itself. It changes the question from "how much comes in" to "how much comes in if that customer leaves". Here is how to answer that before a funder asks.
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Updated October 13, 2026 · Merchant Fund Express
If one customer accounts for most of your deposits, you can still be funded, but the file is read with a second question in mind: what happens to the payment if that customer pays late, cuts volume or leaves? A funder sees concentration directly on your bank statements, because the same payer name shows up on most of the large credits. The term is defined on revenue concentration.
Concentration tends to shape the amount and the term more than the yes or no. A smaller request, a longer payback, or a product that reads the customer rather than you, such as invoice factoring, can make a concentrated file work.
What portion of the last three months came from one payer. One customer at 30% reads very differently from one at 80%.
Whether that customer pays on a regular cycle. Steady credits on the same day each month read as reliable; gaps read as risk.
How long the relationship has run and whether a written agreement sets its term. Twelve months of history is stronger than three.
Whether the rest of your deposits could carry the payment on their own if the anchor customer stopped.
A commercial cleaning company deposits $80,000 a month, about $18,462 a week. One hospital system pays $56,000 of that monthly, 70% of deposits. The other $24,000 comes from 22 smaller accounts. The company asks for $100,000 to add a crew.
Assumptions: factor rate 1.30, 52 weekly payments, funding Monday, November 2, 2026, with the first payment on Monday, November 9, 2026 and the last on Monday, November 1, 2027. Total repayment: $100,000 × 1.30 = $130,000. Weekly payment: $130,000 ÷ 52 = $2,500.
| With the anchor customer | If the anchor customer leaves | |
|---|---|---|
| Weekly deposits | $18,462 | $5,538 |
| Weekly payment | $2,500 | $2,500 |
| Payment as a share of deposits | About 13.5% | About 45.1% |
At 13.5% the payment is comfortable. At 45% it is not something $24,000 a month of revenue can carry for long. That gap is exactly what a funder is weighing, and it is why the request may come back smaller, longer, or paired with evidence that the contract is secure.
All figures in worked examples are illustrations of the arithmetic, not offers or quotes. Real terms depend on your file and the funder.
Send these with the application rather than waiting to be asked. They answer the question before it holds up the file. Statements still come first, as PDFs; see bank statements for a business loan.
If the anchor customer pays on net 30 or net 60 terms and has a strong credit profile, invoice factoring reads that customer's ability to pay instead of your deposit pattern. The comparison is on invoice factoring vs a merchant cash advance. If the honest stress test shows the remaining accounts cannot carry any payment, the better decision is often to grow the smaller accounts first and borrow after concentration comes down.
Check your payment against both columns of the table above with the payment burden calculator, then run the eligibility check. When the contract and statements are ready, apply.
Often, yes. Concentration usually shapes the amount and term rather than deciding the answer alone. A funder weighs the share of deposits, the payment rhythm, the contract and what the remaining revenue could carry.
It is visible on your bank statements. The same payer name appears on most of the large deposits, so it is better to explain it up front with the contract and payment history.
Yes. A written agreement with a clear term and renewal date, plus a record of on-time payments, turns an unknown risk into a documented one.
It can be, when the large customer pays on net terms and has strong credit, because factoring reads that customer's ability to pay. It does not fit businesses paid at the point of sale.
Usually not until the outcome is known. Borrowing against revenue that may stop is the riskiest version of a concentrated file.
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