> ## Documentation Index
> Fetch the complete documentation index at: https://docs.nextlevelmca.com/llms.txt
> Use this file to discover all available pages before exploring further.

# What does “Funds prior defaults” do?

> How a lender's prior-default setting, the deal's Prior MCA default switch and DataMerch decide whether a lender can take a merchant with a past default.

Most lenders won't fund a merchant who has defaulted on an MCA before. **Funds prior defaults** records which of your lenders will. NextLevel MCA uses it to keep defaulted merchants away from lenders that don't take them.

## The lender setting

**Funds prior defaults** is a switch in the **Credit & risk** group on a lender's **Criteria** tab (click **Edit criteria**, then **Save criteria**). You need the **Edit Lenders** permission.

* **On**: the lender takes merchants with a prior MCA default.
* **Off** (the default): a deal that counts as defaulted never matches this lender.

## When a deal counts as defaulted

A deal counts as having a prior default in either of these cases:

1. **A rep marks it.** On the deal's **Submissions** tab, open the **Matching inputs** card and turn on **Prior MCA default**. Only your team sees this card; nothing in it is asked of the merchant.
2. **DataMerch reports it.** If your workspace has [DataMerch connected](/help/datamerch), the business's most recent successful DataMerch check is used. Only a note in a **Default** category counts. Slow-pay or other notes don't.

<Warning>
  Once anyone on your team has flipped **Prior MCA default** on a deal, that switch decides, and DataMerch is no longer consulted for that deal. Turning the switch off tells NextLevel MCA the merchant has no prior default, even if DataMerch reported one. The switch doesn't show a DataMerch result, so check the DataMerch card on the deal's **Underwrite** tab before you change it.
</Warning>

## What happens in matching

| The deal | Lender with Funds prior defaults on | Lender with it off |
| - | - | - |
| Not defaulted | No effect | No effect |
| Defaulted (marked or DataMerch) | Passes the check | **Disqualified** |

* A disqualified lender scores 0 and shows a red **Disqualified** pill on the deal's **Submissions** tab. It drops off the **Ranked** list into the **Disqualified** section. You can still tick it and submit if you know better.
* Turning the setting on doesn't raise a lender's score. It only stops the lender being ruled out.
* Click the lender's score ring (**Why this score?**) to see the **Prior MCA default** check. The **Deal** column says *marked on the deal* or *DataMerch:* followed by the note's category.

## Funds reversals works the same way

The **Funds reversals** switch sits next to it on the lender. It applies when a rep turns on **ACH reversals** in the deal's **Matching inputs**. DataMerch doesn't set this one.

## Common problems

<AccordionGroup>
  <Accordion title="A lender is disqualified for “Prior MCA default” but the switch on the deal is off">
    DataMerch reported a default for this business. Check the DataMerch card on the **Underwrite** tab. If the note is wrong or about a different merchant, turn **Prior MCA default** on and then off: the deal is then treated as having no prior default.
  </Accordion>

  <Accordion title="A defaulted merchant still matches a lender that doesn't take defaults">
    Nobody has marked the deal, and either DataMerch isn't connected, hasn't checked this business, or found no Default note. Turn on **Prior MCA default** in **Matching inputs**.
  </Accordion>

  <Accordion title="Where do I find Matching inputs?">
    On the deal's **Submissions** tab, on the right above the submissions table. The card starts collapsed; click the arrow to open it.
  </Accordion>
</AccordionGroup>


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