# Underwriting Source: https://businessloanbroker.ai/glossary/underwriting/ Site: BusinessLoanBroker.ai (powered by Levr) > Underwriting is the lender's review of your business, finances and credit before approving a loan. See what underwriters check and typical timelines. Underwriting is the lender's process of reviewing your business, finances and credit to decide whether to lend and on what terms. It happens after you apply and before you get a final offer, and it is where most applications are approved, repriced or declined. ## Key facts - **Also called:** Credit review, credit analysis, loan review, due diligence - **Where you will see it:** Every business loan, from a one day cash advance review to a 60 day SBA file - **Why it matters:** It decides your approval, your rate, your amount and your conditions ## What is underwriting? Underwriting is a lender's structured answer to one question: will this business repay, and what should we charge for the risk? An underwriter or an automated model reviews your application, bank statements, tax returns, credit reports, debt schedule and collateral, then recommends approve, decline or approve with conditions. The depth varies. An online lender may underwrite from three months of bank statements in an hour. A bank or SBA lender will read two to three years of tax returns, build a [DSCR](https://businessloanbroker.ai/glossary/dscr/), check for [UCC liens](https://businessloanbroker.ai/glossary/ucc-lien/) and order appraisals. Our guide on [what happens after you submit](https://businessloanbroker.ai/guides/what-happens-after-you-submit/) walks through each stage. ## How is underwriting used? Underwriting turns your documents into a decision. Here is a typical review of a $150,000 term loan request. - Bank statements: average daily balance of $18,000, four overdrafts in six months. The overdrafts are a flag. - Revenue: $900,000 last year on the tax return, matching deposits. Good. - Credit: owner score of 680, one late payment two years ago. Acceptable for most lenders. - Cash flow: DSCR of 1.35 including the new payment. Passes. - Liens: one old blanket lien from a paid off advance. Must be terminated before closing. Outcome: approved at a slightly higher rate because of the overdrafts, with the lien termination as a condition. That is a normal result, and the conditions become your [stips](https://businessloanbroker.ai/glossary/stips/). ## What do lenders consider normal? Most lenders look at the same five things: time in business, revenue and cash flow, personal and business credit, existing debt, and collateral. Banks typically want two years in business, a credit score around 680 and a DSCR of 1.25. Online lenders typically go to six months or a year in business, a score around 600 and steady deposits. Timelines are typical by lender type: hours to a few days for online lenders, one to three weeks for most bank term loans and equipment financing, and 30 to 90 days for SBA and commercial real estate. See [how long a business loan takes](https://businessloanbroker.ai/guides/how-long-it-takes/). ## What should you watch for? Watch for the things that stall underwriting on your side: missing pages on a bank statement, an unsigned tax return, a balance sheet that does not tie to the return, and an unexplained large deposit. Send complete, consistent documents and answer questions the same day. Watch for lenders who approve without real underwriting. An offer within minutes with no document review is either a very small amount or a very expensive product. Ask whether the first review is a soft credit pull, and avoid applying to many lenders separately, since each hard pull can lower your score. Applying once and reaching many lenders avoids that. ## Related terms Underwriting produces the [term sheet](https://businessloanbroker.ai/glossary/term-sheet/) and the [stips](https://businessloanbroker.ai/glossary/stips/), and it leans on [DSCR](https://businessloanbroker.ai/glossary/dscr/), [collateral](https://businessloanbroker.ai/glossary/collateral/) and [working capital](https://businessloanbroker.ai/glossary/working-capital/). It is slowest and most thorough on [SBA loans](https://businessloanbroker.ai/business-loans/sba-loans/). You can apply here, or ask your AI assistant to prepare your file so underwriting goes faster and apply for you through our [MCP server](https://businessloanbroker.ai/agents/). ## Questions and answers **How long does underwriting take?** Online lenders typically decide in hours to a few days. Banks typically take one to three weeks for term loans and lines. SBA and commercial real estate loans typically take 30 to 90 days because of appraisals, government review and more documents. **Can a loan be declined after underwriting starts?** Yes. A term sheet is not a commitment. Underwriting can turn up a lien, a drop in revenue, a tax issue or an appraisal shortfall that changes the decision. Most declines at this stage come from documents that do not match the application. **Does underwriting always involve a hard credit pull?** No. Many lenders use a soft pull for the initial review and a hard pull only at final approval. Ask before you apply. One application that reaches many lenders avoids multiple hard pulls. ## Related - [What happens after you submit a business loan application](https://businessloanbroker.ai/guides/what-happens-after-you-submit/) - [How long does it take to get a business loan?](https://businessloanbroker.ai/guides/how-long-it-takes/) - [Stips](https://businessloanbroker.ai/glossary/stips/) - [Why business loans get denied and what to fix](https://businessloanbroker.ai/guides/why-loans-get-denied/) ## Apply Apply for the business: https://apply.businessloanbroker.ai/signup?utm_source=direct&utm_medium=organic&utm_content=md-underwriting MCP server for AI agents: https://mcp.businessloanbroker.ai/mcp (docs: https://businessloanbroker.ai/agents/mcp/)