The Right Way To Question An Underwriting Condition

You are seeking some type of commercial or business financing. You may be purchasing a building, in need of additional capital, or replacing outdated equipment all of which will improve the running of your commercial enterprise, your overall profits and your life.

Of course there’s an underwriting process to go through and you’ve gleefully given the lender every piece of documentation they have requested with your application. The lender tells you they like the deal and everything looks good, except about the time you think you are home free, a request for something new pops up that you are simply not able to provide.

Perhaps it doesn’t exist or providing it would infringe on your clients/customers right to privacy. You are told that without this further information your request is denied. Waves of disappointment float over you because you felt confident you fit the parameters when you made your initial inquiry. If you have reached this point, consider refraining from hastily looking into other solutions or starting the process all over again with a different Bank until you have more information.

When an underwriter asks for additional documentation that appears outside normal loan requirements, most people will ask “Why do they need that?” instead of asking:

“What question do you need answered here?”

To the untrained eye the loan process can appear to be fairly black & white without room for creatively. This request for additional documentation is a symptom of a lack of clarification that’s arising from the documentation you originally submitted.

You may feel frustrated when you are asked for additional documentation and it can easily feel like excessive scrutiny. However I am always amazed at how resilient we are once we have more understanding of where there is a lack of clarity rather than the feeling that someone in the back room is asking for “everything and the moon” simply because they can. Remember that the only time a lender actually meets you is through your information. They are assessing their risk and your character based on the information that is front of them. Don’t take it personally.

Finding out what the actual question is that the lender/underwriter needs answered allows you to wear your own creative hat around how else you can provide this clarification. I have also noticed with clients the calm that comes from knowing the aspect that isn’t clear to the lender. This question allows you to understand the piece of the puzzle the lender is trying to put together to get you the financing you want.

Written by Tracia Larimer – a Business Finance Consultant who is passionate about helping business owners find the financing they need to launch, grow and sustain their business. Her sweet spot is the tricky to finance situations, SBA guaranteed and loans for Commercial Farms & Ranches. She can be reached at 503-746-8303 or http://www.facebook.com/AzaraCapital

By Tracia Larimer