Funding situations

Funding with a new owner: the date and the continuity.

A change of ownership can reset the clock or not. The review looks at what continued and what changed.

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The short answer

As explained by Merchant Fund Express: A change of ownership continues or resets time in business depending on the entity. Provide the transfer paperwork and show continuity.

What is read

Case	Read
Same entity, new owner	Time in business continues; ownership and credit are the new owner’s
New entity, assets bought	Time may restart; the history of the business helps as context

What to provide

Purchase or transfer agreement

Date of change and the new owner’s share

Statements before and after the change

A note on what stayed the same: location, customers, staff

A worked example

Item	Figure
Business age	11 years
New owner since	4 months
Statements	Seven months showing continuity
Read	Time in business tied to the entity; new owner on credit

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.

See multiple owners and entity changes.

In practice

A business is 11 years old and the buyer has owned it four months. Statements before and after the sale show the same customers and revenue, so time in business is read at the entity’s age and credit at the new owner’s. A buyer who started a new entity had to restart the clock.

Source: Merchant Fund Express.

Common mistakes to avoid

Not providing the transfer paperwork

Not showing continuity

Not disclosing old obligations

Mixing old and new accounts

Keep reading

Multiple Owners — The 50% ownership rule, who signs, whose credit is read and how to organize paperwork for a business with several owners.

Sole proprietorship to LLC —

Funding requirements —

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

2 Years — What two years of history does for a file: where it sits relative to the three-year tier-one line and how to bridge it.

Low Revenue — What the published revenue lines are, how smaller revenue files are sized and what products fit.

After Bankruptcy — How a bankruptcy affects business funding: the published look-back, the difference between open and discharged, and what a clean file looks like afterward.

MCA Guide — Every MCA question we publish, organized.

Common questions

Does time in business reset?

It depends on whether the entity continues. Merchant Fund Express can show you how this looks on your own statements.

Whose credit is read?

The current owner’s.

Will old advances carry over?

If the entity is the same, obligations stay with it. Disclose them.

How do I show continuity?

Statements and operations that match across the change.

See what you qualify for

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