Prism Data Raises $20M as Lenders Start Scoring Your Bank Account

On this page 7 sections

1. Prism Data's $20M Series a and the Credit Card Company Behind It
2. What Cash Flow Underwriting for Small Business Reads in Your Account
3. A Statement-Day Deposit Barely Moves Your Average Balance
4. Who Gains From Bank-Data Underwriting
5. Factor Rates Aren't Interest Rates: Pricing an MCA Against a Loan
6. Get Your Account Ready Three Months Before You Apply
7. Read Your Statements the Way an Underwriter Will

Key takeaways

• A transfer made just before a statement closes barely changes your average daily balance. A minimum balance you hold all month raises it.
• Paying an MCA back early usually earns no discount, so a faster payback raises the annual cost. The same 1.30 advance works out to about 55% APR over 12 months and about 109% over six.
• Prism reaches lenders through partners like Equifax and Plaid. A lender may score your bank data without ever mentioning Prism.

A lender that runs cash flow underwriting on a small business scores the bank account as well as the owner's credit report. The model reads several months of deposits and debits. It looks at the balance left at the end of each day and at every payment the account bounced. Owners with steady sales and a thin credit file can get approved this way. Owners who park borrowed money in the account the week before applying will find the model sees through it.

Investors are backing the companies that build these models. Prism Data closed a $20 million Series A led by Story Ventures, Axios Pro reported on Oct. 19, 2026. Prism says small business lending is one of the markets it will push into next.

Prism Data's $20M Series a and the Credit Card Company Behind It

Prism grew out of Petal, a fintech credit card company. Petal doesn't issue its own cards: WebBank is the issuer and lender of the Petal Visa card. Petal says it started using automated cash flow underwriting in consumer credit in 2016 and built its own score, CashScore, along the way. Petal launched Prism Data as a unit in 2021, when Jason Gross was CEO and co-founder of both companies, PYMNTS reported. Two years later, in May 2023, Petal spun Prism off as an independent company, according to Electronic Payments International.

Story Ventures' co-investors in the new round are FINTOP, Core VC, Obvious Ventures, 1st & Main Growth Partners and Mana Ventures. Counting the $5 million seed from 2023, Prism has now raised more than $25 million, The Paypers reports. According to FinTech Global, the money will go to a new generation of scores and to wider reach in consumer and small business lending across the U.S. and Canada. Other countries come later.

Merchants never apply to Prism. It sells scores and analytics to lenders, and FinTech Futures names Equifax, Plaid and LexisNexis as distribution partners. A bank that already buys data from one of those firms can add bank-data scoring without signing a new vendor. So the lender reviewing your application may never mention Prism at all.

For business accounts, the bigger news is REFRACT, a new categorization engine trained on more than 30 billion bank transactions. Older tools label each line by merchant name or keyword. FinTech Global reports that REFRACT runs separate consumer and commercial models to work out what each payment is actually for. That matters on a merchant's statement, where a processor payout and a loan disbursement can look like identical one-line credits. Only one of them is revenue.

What Cash Flow Underwriting for Small Business Reads in Your Account

A credit report records how you have repaid debt. Bank-data underwriting asks a more current question: can the cash moving through this account carry one more payment? Axios made the case for it plainly, noting that bureau files can miss changes in a borrower's income or obligations. Lenders get the data in one of two ways. You upload statements, or you authorize a read-only connection through an aggregator, a service that links a lender to your bank with your permission.

Average daily balance is usually the first number an underwriter checks, because it shows the cushion you actually keep. Next come returned items for non-sufficient funds (NSFs) and overdrafts. A recent NSF weighs more than one from last year. Direction counts as much as size. Five months of falling deposits can outweigh a healthy balance, because the model is trying to predict next quarter. Recurring debits to other lenders and cash advance funders show how much of each deposit is already spoken for.

A Statement-Day Deposit Barely Moves Your Average Balance

Plenty of owners believe a big transfer right before the statement closes makes the business look stronger. Here is an illustrative example of why it doesn't.

Assumptions: the statement period is 30 days and the balance sits at $6,000 every day. On day 29, the owner moves $20,000 in from personal savings, so it stays in the account for two days.

• The closing balance jumps from $6,000 to $26,000.
• The average daily balance rises from $6,000 to $7,333: ($6,000 × 30 days + $20,000 × 2 days) ÷ 30.

The closing balance more than quadrupled, but the average rose only about 22%. A categorization engine will also tag the $20,000 as a transfer, so measured revenue doesn't move at all. What does raise an average daily balance is a floor you hold all month. For most merchants, that means scheduling supplier and loan payments for after card deposits land.

Who Gains From Bank-Data Underwriting

Cash flow data won't rescue a weak business. It helps when the credit file says little about how the business actually runs. Take an owner who arrived in the U.S. five years ago: they may have two years of steady card deposits and almost no bureau history. A seasonal shop can hand over twelve months of statements to show that a slow first quarter happens every year. Owners who pay cash for equipment often have thin files, even though years of discipline show up clearly in the account.

Each industry leaves its own pattern in the bank account. If you know yours, you can explain it before an underwriter asks.

Factor Rates Aren't Interest Rates: Pricing an MCA Against a Loan

Most card-accepting merchants have been pitched a merchant cash advance (MCA), which is also sized on sales. Nav's MCA guide explains that an MCA is a purchase of your future card sales, not a loan, and that it generally doesn't report payment history to the business credit bureaus. So it usually won't help build business credit. Instead of interest, the price is a factor rate, a multiplier on the advance that Nav says typically runs from 1.1 to 1.5. Nav also points out a detail many owners miss: paying an MCA back early usually earns no discount.

That last point is why you can't compare a factor rate with a loan's interest rate. The table shows one advance at one factor rate with two payback speeds. It's illustrative only. APR is calculated from the payment schedule, annualized over 252 business days, and assumes no other fees.

Both cost $12,000. The faster payback doubles the annual cost because the same fee is squeezed into half the time. A real MCA usually collects a set percentage of daily card sales (the holdback). A strong month speeds payback and pushes the APR up. Nav puts the range at roughly 35% APR for a low factor rate and 350% or more for a high one.

A term loan or credit line underwritten on cash flow is normally priced with interest and repaid on a fixed schedule. Before you sign, get each offer's total payback and an estimated APR in writing. Also ask whether the lender reports your payments to the business bureaus. Once you know the price, our comparison of a business line of credit vs. a term loan can help you choose between them.

Get Your Account Ready Three Months Before You Apply

Lenders read several months of history, so a fix made the week before you apply won't show. Start early.

1. Route all business revenue into one account. Card settlements and ACH payments belong in the same place as checks and deposited cash, so the lender sees all of it.
2. Pay yourself by labeled transfer. Paying personal bills from the business account blurs both revenue and expenses.
3. Hold a minimum balance and time your payments. If you know when card deposits actually reach your account around weekends and holidays, you can schedule supplier and loan payments for after the money arrives. That keeps NSFs off the statement.
4. Reconcile processor deposits monthly. Some processors deposit sales with that day's fees already taken out. Others pay the full amount and debit fees later. A monthly process to match card deposits to sales lets you explain any gap or hold.
5. Stop disputes before they start. Chargeback debits shrink net deposits and hint at operational trouble. The full chargeback dispute lifecycle shows where clear statement descriptors and proof of delivery prevent them.
6. Avoid stacking advances. Daily debits to several different funders are easy to spot and leave less room for a new payment.
7. Bring a forecast. A 13-week cash flow forecast built from your sales data shows the new payment fits and helps you ask for the right amount.

Don't inflate deposits with circular transfers or borrowed money parked in the account, and never run sales through someone else's merchant account. Categorization engines are built to separate transfers and borrowed funds from earnings. Misrepresenting revenue to a lender can carry serious legal consequences.

Processing fees come out of every deposit too. A compliant program such as zero cost processing for eligible merchants or dual pricing may help offset card fees. Results vary, and the rules depend on your state and the card networks, so confirm current terms before you switch.

Read Your Statements the Way an Underwriter Will

This week, pull your last six months of business bank statements and count every NSF and overdraft. Work out each month's average daily balance, then mark every credit that isn't a sale. That is close to what a cash flow model will see. When offers come in, ask each lender which data it reviews and how many months back it looks. Then get the total cost stated as an APR.

This is general information, not legal or financial advice. Talk to a qualified professional before taking on financing. If messy or hard-to-reconcile processing deposits are part of the problem, you can request a free merchant services quote from MannyPay, and a specialist will respond within one business day.

Sources

1. Exclusive: Cash-flow credit analytics startup Prism Data raises $20M (Axios Pro)
2. Prism Data Tecnologies Raises $20M in Series A Funding (FinSMEs)
3. Prism Data raises USD 20M Series A for cash flow underwriting (The Paypers)
4. Prism Data lands $20m Series A to scale cashflow underwriting platform (FinTech Futures)
5. Prism Data raises $20m to scale cash flow underwriting (FinTech Global)
6. Petal raises $35m in new funding, spins off B2B data analytics unit Prism Data (Electronic Payments International)
7. Petal Launches Prism Data To Offer Its Credit Technology To Other Firms (PYMNTS)
8. Brand Partners (WebBank)
9. Merchant Cash Advance (MCA) Guide for 2026 (Nav)
10. What Is a Credit Card Processing Loan? (Merchant Cash Advance Guide) (Nav)

AR

About the author

Adrian Reyes

Adrian Reyes is Senior Payments & Fintech Editor for Beyond the Swipe, covering credit card processing, merchant accounts, payment technology and processing fees.

This article is for general educational purposes and is not legal, tax or financial advice. Card network rules and state laws change; confirm current requirements for your business.