Frequently asked questions

No. The preliminary items are used to evaluate the opportunity and define the structure of the request.

They let underwriting assess ownership structure, income sources, expense profile, industry risk, collateral and the other variables tied to the loan request.

Based on that initial review, UW-Flow issues a customized, comprehensive checklist. Final documentation depends on entity type, number of guarantors, complexity of income, loan size, property type and program guidelines (SBA, conventional and others).

Submitting the preliminary items lets underwriting prepare a precise, deal-specific checklist and move the file forward efficiently. Build your preliminary checklist →

No. A purchase agreement is not required for initial prequalification.

To move from prequalification to formal underwriting without delays, start pre-screening the request early and keep gathering, updating and analyzing documents as the deal progresses.

Lenders require current documents at submission. Always keep the most recent month's bank statements, updated financial statements and any newly executed agreements on hand. If documents go out of date, underwriting pauses the file until updated versions arrive.

To prevent avoidable surprises during underwriting.

We regularly see business activity, sources of income, related-party transactions, global cash flow exposure or other risk factors prompt an underwriter to request documents from owners with smaller stakes. In some cases, underwriting can require documents from anyone with an ownership interest if their involvement materially affects risk.

Reviewing everyone at 10% or more up front lets us identify concerns early, clarify income sources and prepare explanations before the file reaches credit review. That strengthens the presentation, reduces last-minute conditions and makes underwriting smoother.

They are prepared for different purposes.

Financial statements show the operating performance and financial position of the business, often on an accrual basis. Tax returns follow tax reporting rules, which can include deductions, depreciation methods and adjustments designed to reduce taxable income.

As a result, net income, expenses and asset values can differ significantly between the two. Financial statements give the underwriter a detailed breakdown of income sources, expenses, assets and liabilities.

Tax returns are a starting point, but they are not always enough on their own.

Tax returns report income to taxing authorities and often include deductions, accelerated depreciation and other adjustments that lower taxable income. They do not always reflect the true operating performance or current financial position of the business.

Underwriting will require interim financial statements (a year-to-date profit and loss and balance sheet) to assess current performance, liquidity and debt service capacity. If you do not have them, have them prepared as soon as possible. The more current and organized your financial reporting, the stronger and faster the credit review.

Complete, accurate and fully transparent.

Include every obligation of the company: bank loans, lines of credit, credit cards, equipment and vehicle loans, capital and operating leases, SBA loans, private notes and any other liabilities. For each one, list:

• Lender name and original amount
• Current balance and monthly payment
• Interest rate and maturity date
• Collateral, if any

If an obligation is left off and later found in bank statements, credit reports or tax returns, underwriting may treat it as an undisclosed monthly expense. That lowers debt service coverage and can reduce loan proceeds, delay approval or raise credibility concerns. Full disclosure up front protects your file.

Thorough, accurate and fully supported.

List every asset: cash, investment and retirement accounts, real estate (with estimated market value and related debt), business ownership interests, notes receivable and any contingent liabilities. On the liability side, disclose mortgages, personal loans, credit cards, guarantees, tax obligations and any other debt.

Lenders weigh liquidity, net worth, leverage and global cash flow when setting risk rating, structure and approval strength. Higher liquidity and net worth relative to the loan reduce perceived risk and can improve terms. Incomplete or vague disclosures invite extra scrutiny, delay underwriting or weaken the credit profile.

A well-prepared statement shows financial capacity, stability and credibility, all key to a favorable decision.

Operating agreements govern LLCs. Bylaws govern corporations.

An operating agreement sets out an LLC's ownership percentages, member roles, management authority, profit distribution, voting rights and the process for adding or removing members.

Bylaws set out how a corporation is governed: the roles of directors and officers, shareholder rights, meeting procedures, voting and corporate decision-making.

Both define control, authority and structure, so the lender can confirm who is authorized to sign and guarantee the loan.

To verify the property's income, tenant mix and lease structure.

A rent roll lets underwriting confirm rental rates, lease terms, expiration dates, vacancy, tenant concentration, reimbursements and concessions.

It is reconciled against financial statements and tax returns to validate reported income, and it helps assess rollover risk, cash flow stability and the strength of the tenant base. Without a current, accurate rent roll, underwriting cannot properly judge how durable the income is or calculate reliable debt service coverage.

Yes. Full disclosure is strongly recommended, no matter how much time has passed.

Lenders use third-party background platforms such as LexisNexis to search public records. These searches can reveal criminal records, civil judgments, liens, bankruptcies, UCC filings and other legal matters, even from many years ago. Bankruptcy filings stay in the public record permanently, even after credit bureaus stop reporting them.

Failing to disclose material legal or credit history can raise credibility concerns and create serious underwriting issues if it surfaces during a background check. Disclosing up front lets underwriting evaluate the context, request explanations and assess risk without putting the file at risk.