Merchant Processor Statement

Your bank statement shows a deposit arriving. The processor statement shows how that deposit was built. It opens with gross card volume for the month, subtracts refunds and chargebacks, subtracts interchange and processor fees, and lands on the net that reached your account. Alongside those totals it carries the transaction count, the average ticket, and the split across card brands.

Funders ask for it whenever card sales are the revenue story, which is why it appears so often as a document request for restaurants, retail and salons. It is not usually part of the opening application: the standard file is three months of business bank statements, your identification and a voided check, and the processor statement arrives either with that stack or later as one of the stipulations attached to an approval. The business funding document checklist sets out the full order, and the document readiness checker tells you which version of the stack your product needs.

For your file, this document does work that bank statements cannot. Deposits mix card settlements with checks, transfers and owner contributions, so a bank statement alone cannot say how much of your revenue is customers buying things. The processor statement can, and where a holdback is the collection mechanism, it is also the basis of the arithmetic: the funder is taking a share of settlements measured on this document, not on your deposits.

The confusion worth clearing is that a processor statement is not a bank statement and does not replace one. Underwriters read both, for different reasons. The processor statement proves the revenue exists and describes its quality. The bank statement proves the account can carry a payment, through balances, negative days and the timing of everything else that leaves. Why lenders want your bank statements covers the second half of that pair.

It is also not a fee audit, though reading it as one is usually worth the half hour. The processing costs printed here come off the top of every sale you make, and they are frequently negotiable in a way funding costs are not. Before you apply anywhere, pull the last three statements and check what an underwriter will find on them:

• Gross volume, month by month. Rising, flat or falling tells a story before anyone reads a word of your application.
• Refunds and chargebacks. A business with heavy chargebacks is a different risk from one with none at the same volume, and this is the only document where that is visible.
• Transaction count and average ticket. They reveal whether volume comes from many customers or a handful of large ones, which underwriters weigh more heavily than the total alone.
• Deposit timing and any holds. Reserves or delayed funding by the processor change when money is actually available to absorb a remittance.
• The processor's own fees. Not part of underwriting, but the cheapest money you will find this month is often sitting in this section.