What an underwriter is looking for

Underwriting sounds like a black box because most lenders describe it as one. It is not. It is a person with a checklist, and the checklist is short enough to publish.

Here it is, in the order it gets worked through.

1. Are you who you say you are

Identity, incorporation, and that the business is active and in good standing. This is the part that fails least often and blocks most completely when it does.

2. Do the deposits support a payment

Six months of statements, averaged, with one-off inflows stripped out. The question is not "is this a big business" but "will the payment clear every week without drama".

3. How steady is steady

A flat line and a jagged line can average the same. The jagged one gets a smaller offer, because the payment has to survive the troughs, not the mean.

4. Who is paying you

Forty customers is safer than two. If one customer is more than about a third of your deposits, that is a conversation rather than a decline — we want to know how long they have been there.

5. What are you already carrying

Other advances, other weekly debits, equipment payments. This comes straight off what your deposits can support. It is the number most applicants forget to mention and the one that most often changes the offer.

6. Negative days and NSFs

A handful across six months is normal business. A pattern in the most recent two months is the thing that matters, because it is the most recent months that predict the next ones.

7. Is the trend up or down

Six months rising is a different file from six months falling to the same average. Direction is information.

8. Does the use of funds make sense

Not a test you can fail by having the wrong answer, but a file where the money is going into inventory that turns in sixty days reads differently from one where it is covering a gap that has been widening.

What is not on the list

Your personal credit score is not a gate here, and applying does not trigger a hard pull. There is no business plan, no projections, and no pitch. The statements say more than any of those would.

If your file is strong on six of these and soft on two, say so when you apply. The soft ones are almost always explainable, and an explanation offered up front is worth more than one extracted later.