A paper grade is a letter (roughly A through D) that summarizes how risky a merchant’s file is. It’s shorthand funders use to decide how much to advance, over what term, and at what factor rate. A paper is the best quality and lowest risk; D paper is the weakest.
What separates the grades
| Grade | Typical profile | Effect |
|---|---|---|
| A | Strong credit, healthy balances, 0 NSFs, no open positions | Best factor, longest term |
| B | ~600–640 FICO, or A-quality with a couple of NSFs / a minor derog | ~10%+ higher factor |
| C | Sub-600 credit, several NSFs/negative days, thinner balances | Higher factor, shorter term |
| D | Distressed cash flow, heavy NSFs, existing stacking | Smallest advance or decline |
The bank-statement metrics do most of the grading work: NSF count, negative days, average daily balance, true revenue and existing positions. Getting those numbers right — and trustworthy — is what a clean underwriting read is for.