Guide

How to explain a bad month to a funder a practical guide.

Everyone has one. The difference is whether it is explained.

✓ Checking what you qualify for does not affect your credit score.

Overview

Everyone has one. The difference is whether it is explained.

Name the cause: a flood, a lost contract, a delayed shipment, a closure for renovation. A concrete reason is more convincing than a general one.

Point to the following month's deposits or a signed contract that restores the pattern. A single dip followed by recovery reads as noise.

Two or three sentences with dates and numbers. Long justifications read as defensive.

An insurance claim, an invoice, a contract or an email thread supports the story. Funders do not need much, but one document helps.

Monthly revenueTypically from around $20,000 a month in deposits for Canadian files. The exact line varies by funder and by file.

Time in businessTypically about 12 months. Newer businesses can be reviewed, but the options narrow.

Account healthLimited low-balance or negative days. Funders read the last few months of bank statements for this.

CreditScores from 500 are considered. A score of 600 or higher opens more options and better offers.

DocumentsA signed application and recent business bank statements, typically the last four months.

Existing advancesFiles with an existing advance can be reviewed, including second position.

How long should my explanation be?

Two or three sentences. Funders prefer concise and factual.

Do I need to disclose a one-off?

Yes, if it affects the deposits. Hiding it can look worse than the event.

What if there is no clear cause?

Say that, and point to the following months. A pattern of recovery is persuasive.

Educational information only. It is not legal, tax or accounting advice.

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