How Funders Evaluate You
It’s not just about credit scores anymore. Modern funders use AI and real-time data to assess your business health. Here is the exact roadmap they follow.
The Underwriting Timeline
From application to funding, every hour counts.
Initial Upload
Automated parsing and data extraction from bank statements and application forms.
System Actions
- PDF Metadata Analysis
- Tamper Detection
- Format Standardization
Automated Analysis
Risk scoring, pattern detection, and initial qualification checks against lender criteria.
Underwriter Review
Human review for edge cases, large amounts, or complex profiles.
Decision & Offer
Approval, rejection, or counter-offer with terms.
Bank Statement Analysis
Funders don't just look at the balance. They analyze the velocity and stability of your cash flow.
Revenue & Cash Flow
- Monthly deposits: Average, trend, and consistency
- True revenue: Separating business income from loans & transfers
- Cash flow patterns: Inflow vs. outflow ratios
- Seasonality: Month-to-month variations
- Growth trajectory: Revenue trends
Risk Indicators
- NSF: Frequency and recency of bounced payments
- Negative days: Days with negative balance
- Loan stacking: Multiple active loans detected
- High volatility: Extreme swings in daily balances
- Returned items: ACH returns or chargebacks
Debt & Obligations
- Existing payments: Debt service as % of deposits
- Loan burden ratio: Repayments vs. monthly revenue
- Payment consistency: On-time vs. late payments
- Debt-to-income: Total obligations relative to cash flow
- Stacking risk: Concurrent funding products
Health Metrics
- Cash cushion: Days of runway
- Balance stability: Minimum daily balance trends
- Transaction patterns: Regular business activity
- Account age: Active duration
- Industry benchmarks: Peer comparison
The Underwriter's Assessment
Algorithms score the data, but humans weigh the context. Here is how they balance your profile.
Key Strengths
Positive Signals
Clean Account Behavior
No overdrafts or NSF fees in the last 90 days indicates disciplined cash management.
Healthy Revenue Base
Strong gross revenue with verifiable business income sources matching industry standards.
Liquidity Spikes
Periodic strong cash inflows indicating robust sales cycles or seasonal peaks.
Critical Concerns
Risk Factors
High Phantom Revenue
Inflated deposits from transfers or loans that don't reflect true business income.
Lender Crowding
Multiple concurrent daily or weekly repayments detected ("stacking").
Low Daily Balances
Consistently low ending balances posing stability risks for new payments.
Application Verification
Before looking at bank data, systems verify the core facts. It's a digital handshake.
Business Info
- Legal Name
- Structure
- Address
Financials
- Annual Revenue
- Existing Debt
- Ownership %
Cross-Check
- Bank Data Match
- Name Validation
- Public Records
Risk Profile
- Industry Risk LOW
- Management Exp. HIGH
- Compliance CHECK
Security Protocols
Compliance is non-negotiable. We split verification into two distinct tracks: Identity (KYC) and Entity (KYB).
KYC Protocol
Know Your Customer
Required Docs
KYB Protocol
Know Your Business
Required Docs
The MerchantScan Advantage
We automatically extract and pre-validate your KYC & KYB data before you apply. This reduces "back-and-forth" emails by 70% and speeds up funding.
How Decisions Are Made
The final verdict is a calculation, not a guess.
1. Automated Score
100+ data points create your baseline risk profile.
2. Human Context
Underwriters adjust for stories data can't tell.
3. Final Terms
Approval amount, factor rate, and term length.
Know Where You Stand
Don't apply blindly. Upload your statements and get a free, AI-powered pre-underwriting report in seconds.