top of page

What are lender compliance items?


When you apply for a business loan there are items lenders will check for in order to approve your loan. These items are called lender compliance items. Usually, the business loan officer sitting across the desk from you will not know what these items are. They don’t know because they just take your application and feed it into the internal banking underwriting system in order to use artificial intelligence to get a response. If the internal banking underwriting system says your loan is declined it’s because it checked all of the lender compliance items required to approve a loan, and one or more were incorrect. Did you know that having even one incorrect lender compliance item will cause your business loan to be declined? And the craziest part is that the loan officer won’t even be able to tell you which lender compliance item is incorrect. Here is where we come in, we can guide you through some of the reasons why you may get declined.


Reason #1: Business Credit


The internal banking underwriting system checked your business credit report and you either have no business credit at all or your business is below 70 with all three major business reporting agencies. The major business reporting agencies are: Equifax, Experian and Duns & Bradstreet.


Reason #2: Business Address


The lender’s internal banking underwriting system checked your business address against the postal office database and it came back as a non-business address causing it to be declined. Remember your business has to be separated from you personally, so don’t use your home address as a business address.


Reason #3: Business Phone


As with the address, the lender’s internal banking underwriting system checked your business phone number against the Federal Communications Commission database and it came back as a residential or cellphone number.


Reason #4: Entity in Good Standing


The lender’s internal banking underwriting system checked with the Secretary of State to see if your business is listed, and it’s not, or it’s NOT in good standing. Being in good standing indicates that your business has filed all reports and fees with the Secretary of State's office, that it exists and is authorized to be in business in your state.


Reason #5: 411 Listing


The lender’s internal banking underwriting system checked with the national 411 directory assistance and you are not listed under the exact legal name. This helps creditors know that you are a credible and legitimate business.


There are 15 more items that lenders will check in order to make a decision about approving or denying your loan application. If we told you that over 90% of business loans applications are denied, would you understand now why? There are many more moving parts behind the scenes for business loans compared to personal loans, meaning that there is a lot more that you need to know when applying for business loans! We can guide you through the entire process, help you build credit and get the funding you deserve. Don’t let unknown technicalities keep you from building the business of your dreams.


Need BUSINESS CREDIT? Text CREDIT to 903-418-4571 to get started!


29 views0 comments
bottom of page