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How we underwrite

The tests we run, published.

We’re a new brand, so we can’t point at a decade of closed deals. What we can do is show you exactly what happens to your file — the same six tests, in the same order, every time.

  1. 01

    Normalize the cash flow

    We rebuild what the business actually earns before financing. Net income, plus owner compensation, plus interest, plus depreciation and amortization, plus non-recurring items — then less a market salary for whoever will run it going forward.

    Why it matters. A lender charges a market wage before measuring coverage. A file that counts the owner's entire draw as available cash flow will be re-cut by the lender and come back short, usually after weeks have passed.

    OutputSeller's discretionary earnings, and adjusted EBITDA where the deal warrants it.

  2. 02

    Price the facility being requested

    Level-payment amortization of the actual ask. Where you give us a proposed payment we test that payment. Where you don't, we price it at sba 7(a) benchmark terms — 11% over 120 months — and say so.

    Why it matters. Coverage means nothing without a structure attached. "Can I afford $750K?" has no answer until someone states the rate and the term.

    OutputNew annual debt service, and whose terms produced it.

  3. 03

    Test coverage against the real floor

    Cash flow divided by total debt service — the new facility plus everything you already carry. We hold SBA files to 1.15× and bank revolvers to 1.25×. Acquisition files frequently run higher, around 1.35×.

    Why it matters. These are the numbers lenders actually use. A broker who tells you 1.0× is fine is setting you up for a decline; one who tells you 2.0× is required is talking you out of a deal you could get.

    OutputDSCR, whether it clears, and the largest ask that would.

  4. 04

    Find what can be underwritten instead

    If coverage doesn't clear, we check what else carries the deal: equipment as collateral, receivables and your customers' credit, a signed contract and who awarded it, or titled inventory on a lot.

    Why it matters. Four structures don't underwrite your earnings at all. A file that fails a credit test can still be perfectly financeable — and most people are told no rather than told which of the four applies.

    OutputWhich specialty structures fit, and what each would need.

  5. 05

    Check program eligibility line by line

    SBA size standards and use-of-proceeds rules, franchise directory listing where relevant, industry eligibility, collateral and guarantee requirements, and the lender-specific credit boxes we maintain.

    Why it matters. Eligibility is binary and it is checkable in advance. Discovering after forty days that the brand isn't on the SBA Franchise Directory is an avoidable, expensive surprise.

    OutputWhere you're eligible, and where you are not.

  6. 06

    Route it, then a person reviews it

    The file is matched against our lender repository by product, size, sector and geography — then a human reads the memo before it reaches you, and reads it again before anything goes to a lender.

    Why it matters. Automated matching is fast and occasionally confidently wrong. The review is what catches that.

    OutputThe shortlist, and why those lenders.

What we won’t do

  • Invent a number to fill a gap. If there is no proposed payment and no stated ask, there is no coverage figure — and we say there is no coverage figure rather than assuming a rate that makes the file look better than it is.
  • Quote a monthly rate. Annualized, or as a spread over a published index. The one exception is our bridge product, priced on a factor rate and always shown with its annualized equivalent beside it.
  • Shop a file that will be declined. Ten submissions to lenders who were never going to close it damages your credit and wastes a month. We would rather lose the deal.
  • Send anything without your approval. You see the memo first and you approve every submission.
  • Originate a cash advance. Not one — though refinancing you out of them is something we do all day.

The floors we hold, so you can check our work.

1.15×
SBA 7(a) coverage floor

Below this, resize or restructure — it will not be approved as asked.

1.25×
Bank revolver floor

Commercial banks hold a higher line than the SBA does.

1.35×
Typical acquisition floor

Acquisition files are underwritten more conservatively than working capital.

Individual lenders set their own thresholds and some run tighter. These are the floors we use to decide whether a file is worth submitting.

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