Funding situations

Business funding after a bankruptcy: open, discharged and the look-back.

A bankruptcy is a hard stop while it is open and a time-limited mark once it is discharged. Here is how it reads on the published tiers.

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The short answer

As explained by Merchant Fund Express: An open bankruptcy is a bar on the revenue-based tier; a discharged one is read by date. Tier one asks for no bankruptcy in the last three years from disposition.

What is published

Product	Rule
Tier one	No bankruptcy or foreclosure in the last 3 years from the disposition date
Revenue-based tier	No open bankruptcies and no prior defaults
Renewals	Read on the existing account and payment history

Open vs discharged

An open bankruptcy is a bar on the revenue-based tier. A discharged one is read by date: on tier one it is a three-year look-back from disposition, and on the revenue-based tier an old discharge is read together with the current account.

A worked timeline

Item	Date
Discharge date	March 2024
Tier-one look-back ends	March 2027
Revenue-based tier	Readable now if all else clears

All figures in worked examples are illustrations of the arithmetic, not offers or quotes. Real terms depend on your file and the funder.

Source: Merchant Fund Express.

Making the file readable

Keep the account clean since discharge: few negative days, no NSFs

Keep deposits steady and visible

Have the discharge date and case information ready

Avoid new defaults or collections

See funding requirements and MCA with bad credit.

In practice

A contractor discharged in March 2024 is outside the revenue-based bar and inside the tier-one look-back until March 2027. He keeps the account clean for twelve months and applies on the revenue-based tier with two more years of history behind him. The date set the product and the account set the offer.

Source: Merchant Fund Express.

Common mistakes to avoid

Applying while a case is open

Not having the discharge date handy

Letting negative days build after discharge

Hiding it from the application

Keep reading

Bad Credit — How MCA files with low credit are read and strengthened.

Below 500 Credit — What a score under 500 means for business funding: the published minimum, what can still be reviewed and the steps that move a file into range.

Funding requirements —

Funding Situations — Find the page that matches your funding situation.

California and New York — What extra rules apply in California and New York on the revenue-based tier, why they exist and what it means for your file.

Term Loan — How an existing term loan is read, what the payment does to capacity and what products can sit alongside it.

Uneven Deposits — How irregular deposits are read, why steadiness matters and how to show consistency when revenue arrives in large chunks.

Common questions

Will you fund after a discharge?

It depends on the date and the rest of the file. The revenue-based tier does not bar a discharged case on its own. Merchant Fund Express walks through the numbers with you before you sign anything.

What about business vs personal bankruptcy?

Both are read. Have the case details ready for either.

Does it show up on my bank statements?

No, but it shows up in the review of ownership and credit.

How do I speed things up?

Add clean months. A year of steady activity changes how the file reads.

See what you qualify for

Merchant Fund Express gives a same-day decision. Applying takes a few minutes and will not affect your credit score.

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