Underwriting is the lender's process of evaluating a financing application to decide whether to approve it — and at what amount, rate, and terms. For business lending, underwriters weigh creditworthiness, cash flow, time in business, existing debt, and collateral. How heavy and manual the process is varies by product, from minutes (revenue-based) to weeks (SBA).
Underwriting answers one question: how likely is this borrower to repay? Underwriters assemble a picture from several inputs — personal and business credit, revenue and cash flow (often read from bank statements), time in business, existing debt obligations and any other advances, collateral, and the stated use of proceeds. The classic framing is the 'five C's' of credit: character, capacity, capital, collateral, and conditions. The process differs sharply by product. Bank and SBA loans use full-documentation, largely manual underwriting (tax returns, financial statements, a use-of-proceeds plan) over days to weeks — which is why they offer the lowest rates. Revenue-based financing and many non-bank lines use automated, cash-flow-based underwriting read primarily from bank statements, approving in hours at higher cost. Stronger credit, longer time in business, consistent deposits, and lower existing debt all improve the outcome. The SBA's lender operating procedures (SOP 50 10, https://www.sba.gov/document/sop-50-10-lender-and-development-company-loan-programs) govern 7(a)/504 underwriting; the CFPB (https://www.consumerfinance.gov/) explains evaluating financing offers; and the Federal Reserve's Small Business Credit Survey (https://www.fedsmallbusiness.org/) tracks approval patterns. ClearValue Lending reviews the full file and routes it to the one partner whose underwriting box fits.
Credit (personal and business), revenue and cash flow (often via bank statements), time in business, existing debt, collateral, and use of proceeds — the 'five C's' of credit. The weighting and documentation depth vary by product.
SBA/bank underwriting is full-documentation and largely manual (tax returns, financials, a use-of-proceeds plan), which takes days to weeks but earns the lowest rates. Revenue-based products underwrite automatically off bank statements in hours, trading higher cost for speed and accessibility.