Funding
M any entrepreneurs still believe outdated myths about business credit—and it’s hurting their chances of getting approved for funding. The truth is, the way lenders decide who gets funding has completely changed. The old system relied on manual, full- document underwriting. Today it’s all about automatic underwriting. Let’s break down the difference between these two approaches and show you how to adapt to the new way of doing things. THE OLD PARADIGM: MANUAL, FULL-DOC UNDERWRITING Before 2008, lenders mostly relied on manual underwriting, a process requiring them to review every application by hand. You had to provide extensive documents, and they would base their decision on a Dun & Bradstreet PAYDEX score. Back then, small businesses faced an uphill battle because lenders didn’t like making loans under $1 million. Why? Because approving smaller loans required just as much time and paperwork as big ones, and it wasn’t worth their effort. For entrepreneurs, this system was inefficient and hard to navigate. Many applications were rejected simply because small businesses didn’t fit the mold of what lenders wanted. THE NEW PARADIGM: AUTOMATIC UNDERWRITING In 2008, everything changed. Now, most lending decisions are made using automatic underwriting systems. These systems use algorithms to decide whether you’re fundable, based on specific criteria. Here’s how it works: ▷ 80% OF THE DECISION COMES FROM YOUR PERSONAL CREDIT PROFILE.
Your Borrowing Method Is Holding You Back UNLOCK FASTER, EASIER ACCESS TO CAPITAL WITH AUTOMATIC UNDERWRITING.
MERRILL CHANDLER
50 | think realty magazine :: march - april 2025
Made with FlippingBook Online newsletter