Initial Underwriting Process

An underwriter is someone who receives and checks a business owner’s personal credit. To qualify for a traditional Business Cash Advance, a merchant must have at least 500 credit. If he doesn’t, he can still take advantage of a Starter Program. The underwriter verifies any outstanding current tax liens, recent or open bankruptcies, collections, and/or judgments. Be honest if you have any delinquent accounts as they will still come up during the underwriting process.

Lenders appreciate a business owner who can be transparent from the beginning. In fact, they will work harder in dealing with you as they look at ways to get your business funded. Tax liens, open bankruptcies, and collections are problems that lenders are willing to take on with you. As long as the underwriter wants to proceed, he can produce a program that benefits both the merchant and the lender.

Each case is unique; but the maximum value a business owner can qualify for usually ranges between 125%-150% of what he processes in monthly Visa/MasterCard sales. However, you can qualify for more or less, depending on your gross sales. For example: if your credit card sales only amount to 20%, the lender may be willing to give you more money and take a higher percentage from your credit card receivables. But if the underwriter sees that a larger payback percentage may harm your cash flow, he might lower the rate to save your business.

To read about contracts and additional documentation click here!

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