Average Monthly Revenue
A business's typical monthly revenue, usually calculated from several recent months of bank deposits or financial statements, used to size how much financing it can support.
Lenders commonly use average monthly revenue, rather than a single month or annual total, to smooth out normal month-to-month fluctuations and get a more reliable baseline for underwriting, especially for products like merchant cash advances that are sized as a multiple of monthly revenue.
Seasonal businesses may see this averaged figure adjusted or supplemented with a longer look-back period, since a straight average across a short window can understate or overstate true typical revenue.
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