The loan underwriters are the people who are responsible for taking the decision of approving or rejecting the loan requests. They work on various calculations, facts, documentation, and much more, which helps them in getting to the final decision whether one is liable for a loan to promote your small businesses, and if yes, what would the amount be.
Here is a piece of advice from the loan underwriters for the small business owners that would help you get through the entire process suitably.
The small business loan process can be discouraging
Applying for the loan includes a big questionnaire which can be irritating. Worries like the chances of your loan getting sanctioned, the time period it would take during the application, and how long would the approval take, what would the results be? and much more keep on banging the head till the results are revealed.
It always seems to be new, even if you have applied before
When an individual applies for a loan, he often feels he is walking in the dark, with a surprise in any corner. Even if you have applied for a loan before, every time you apply you get the same feeling like the process differs according to the loan amount, banks or finance companies, rules and regulations, and much more.
Look for Fundera, to help you in the loan process
Thinking of how to reduce the burden and hassles regarding the loan process for your small business? Have you tried Fundera? Fundera is used by various self-employed individuals looking for loans for their business growth. It has successfully helped various small businesses in achieving their goals by enlightening the complete loan process.
Why is the underwriting process different from the Funding circle?
Talking about the underwriting process, the Funding circle is much different from Dealstruck. Where Dealstruck takes around 2 to 3 days for offering term sheet or suggesting another funding partner, Funding Circle is similar to the marketplace and not the lender of the balance sheet. They match the creditworthy of the small businesses that are looking for capital along with investors.
The list of documentation
When it comes to the list of documentation, both the short-term lenders Funding Circle and DealStruck need the same list of documents. The list of documents includes financial statements, tax returns, and A/R aging reports for the process. The A/R aging reports are demanded only for the B2B companies.
What is the portion of manual and automation in the underwriting process?
Many funding companies who are using automated systems for getting to the right decision of the underwriting process. But with Fundera, the entire process, especially the underwriting process, is carried out manually.
What is the role of the credit score of the borrower?
During the process, the underwriter surely wants to consider the credit score of the small business owner. He needs to know whether you would be able to pay back the loan or not, and this can be derived from the credit score itself. Basically, the credit score needs to be 600 or more.
Challenges of small business underwriting
The borrowers many times make efforts to provide answers the underwriters are looking for. And this many times end up in confusing the things and lastly end up with closing. The solution to this is being completely transparent to the underwriters regarding the loan requests to make it quick and easy.
Important factors at the time of underwriting
No doubt, credit history is essential when it comes to underwriting; the stability in operational and financial grounds is equally important. This includes factors like cash flow, passion regarding the market opportunities, and much more. The owners need to be passionate about the market and its situation at the time of underwriting.
Some surprising factors for the borrowers
The particular use of income is essential at the time of underwriting. This helps the underwriter in learning about the future plans of the borrower regarding the business. The positive reviews of the clients on various social media sites, help in improving the potential of the business.
The entire process of funding merely takes five days for Dealstruck and 10 for Funding circle if every document submitted and information provided is true. Again, if the funding would seem to be a failure, the process might give negative results.