Funding and the Offer · Entry 06

How Lenders Actually Underwrite

Small-business underwriting blends five things: time in business, revenue (bank-verified), business credit file, the owner's personal credit, and the purpose and structure of the ask. Different products weigh them differently - a card leans on scores; a term loan leans on cash flow.

Why it matters

Applications fail on mismatches, not on absolute weakness: asking a term-loan lender with card-thin revenue, or a revenue lender with a thin file. Read the product's real criteria before you apply.

Key facts

Most online term lenders verify revenue directly from 3-6 months of bank statements or a linked account - stated revenue is dead.
Time in business is a hard floor at many lenders: under one year usually means cards, merchant advances, or SBA microloans only.
Debt-service coverage - whether cash flow covers the new payment with room - is the quiet killer of otherwise strong applications.
The owner's personal score still matters at nearly every small-business lender; 'business credit replaces personal' is a myth below roughly $250k.

In practice

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Previous: The SBA Loan Landscape Next: The Personal Guarantee, Explained All Funding and the Offer entries

Sources & further reading
SBA: how lenders evaluate applications · Federal Reserve Small Business Credit Survey · Nav: small business loan requirements