Funding situations

Funding with multiple owners: the 50% rule and who signs.

The published rule is ownership of at least 50% for the signer. With several owners, the paperwork is the file.

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The short answer

As explained by Merchant Fund Express: The published rule is at least 50% ownership for the signer. Without one, owners sign together and each meaningful owner is reviewed.

The rule

The tier sheets ask for at least 50% ownership. For businesses where no one owner has that, the owners typically sign together, and each meaningful owner is reviewed.

A worked set-up

Owner	Share	Role
Owner A	45%	Needs a co-signer or all owners to sign
Owner B	35%	Sign
Owner C	20%	ID if 25% is crossed or requested

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.

What to have ready

An ownership breakdown with percentages

IDs for all owners with 25% or more

An agreement among owners, if one exists

Who has authority to sign for the business

See partnership and LLC.

In practice

A business is owned 45/35/20. All three agree on who signs for the business, and the two largest provide ID and credit. The file moves in a day because the authority was documented. A similar business that had not settled who signs lost a week.

Source: Merchant Fund Express.

Common mistakes to avoid

Not documenting who signs

Not providing ownership percentages

Adding an owner to qualify

Not having all IDs ready

Keep reading

Partnership — How a partnership is read: who is a guarantor, how ownership is split and what to provide.

LLC — How an LLC is read: ownership, the 50% rule, personal guarantees and what to have ready.

New Owner — How a recent change of ownership is read, why the date matters and what to provide.

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

Funding requirements —

IRS Payment Plan — How an installment agreement is read, why on-time payments help and what to document.

Equipment Lease — How an equipment lease or loan payment is read, what the lien covers and how it fits next to other funding.

MCA Guide — Every MCA question we publish, organized.

Common questions

What if no one owns 50%?

Owners sign together and each is reviewed. Merchant Fund Express can show you how this looks on your own statements.

Whose credit is pulled?

Typically the signer’s and, where required, other owners’.

Can I add an owner to qualify?

A recent change is read as a change of ownership.

Do non-owner managers sign?

Not as principals. Authority is documented.

See what you qualify for

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