Glossary · Doing the deal
Lender underwriting
In short
This is the lender's process of evaluating your loan application and the business's financials to decide if you and the business are creditworthy for an SBA 7(a) loan. It determines if the deal goes forward.
What it means in a deal
The lender reviews your personal credit, experience, and financial strength, alongside the target business's cash flow, assets, and liabilities. They assess repayment capacity and collateral adequacy. Be prepared to provide extensive documentation; thorough preparation speeds this critical step.
Official sources
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Lender underwriting
- How does a lender document adherence to prudent lending standards in the underwriting credit memo?
- Can the lender charge application fees or underwriting fees in addition to the SBA guaranty fee?
- What specific factors should a lender assess when underwriting a business with a high customer concentration?
- How does a lender ensure compliance with 'prudent lending standards' when underwriting a startup 7(a) loan?
- What is the lender's process for underwriting a change of ownership with an earn-out provision?
- What specific lender actions or omissions during underwriting are most likely to result in a 'repair' of the SBA guaranty?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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