Tag

underwriting

3 insights

A falling curve showing how a merchant's margin coverage of their daily holdback collapses as advances stack, passing below the break-even threshold at the second advance.

Every Lender in a Stacked Position Underwrote It Correctly

One advance takes 10 to 20 percent of daily receipts. Two or more take 30 to 40. Each funder assessed the file in front of it, and the position that kills the merchant exists only across files.
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Two bullet bars showing that 59 percent of small business debt holders secured their debt with a personal guarantee against 51 percent using business assets, and that 88 percent of owners applied using personal credit history against 12 percent who used business credit only.

Fifty-Nine Percent of Small Business Debt Is Secured on a Household You Underwrite Once

Most small business debt is backed by a personal guarantee, which makes a household balance sheet the collateral. Merchants get monitored daily. Guarantors get looked at once, at origination.
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A labelled diagram of how a small business owner self-funds before applying: a cash gap appears, personal credit covers it for 75 percent of owners, utilization rises for 23 percent and personal credit scores fall for 12 percent, and 25 percent are then denied or significantly delayed on the business application that follows.

Three in Four Applicants Already Borrowed Before They Reached You. It Was on Personal Credit.

Revolving credit is growing at nearly twice the pace of everything else, and 75 percent of small business owners funded the business on personal credit in the past year, up from 49 percent in 2024.
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