In the past, the underwriting stage of applying for a small business loan was a long, drawn-out, and nerve-wracking process. Traditional banks take weeks to review an application, and the Small Business Administration’s wait time to make a decision is measured in months. Regardless of whether or not you get approved, the gap between starting an application and getting funding can be brutal.
The waiting game during underwriting has changed massively with the rise of online lending. Take BlueVine, for example: In part one of our series on working with them to secure a line of credit, we discussed how to start an application. Here, we’ll look at their relatively speedy underwriting process, including what to expect and what you’ll need on hand.
What is the underwriting process at BlueVine?
Underwriting is when the lender takes the time to review all the information a client has submitted about their business—their financial statements, revenue, social media presence, and more—and makes a decision about how much the client can receive in working capital, and at what terms.
In order to reach the underwriting stage at BlueVine, small business owners interested in a revolving line of credit must meet the basic requirements and fill out the online application, which can be done in a matter of minutes. For a walkthrough of that stage, including what might disqualify you from consideration, check out part one of our series.
Underwriting officially begins when you complete your application and respond to the activation email that asks for email verification, a bank account where funds can be sent, and an agreement to let BlueVine run your credit.
How long does underwriting take with BlueVine?
BlueVine makes a commitment to its customers that underwriting will take less than 24 hours from start to finish. The lender has a team of analysts that work 24 hours a day, 7 days a week to fulfill that guarantee.
What will analysts review during this process?
Like other online lenders, as opposed to traditional big banks, BlueVine works to take a holistic view of the business in order to make a decision.
There are some minimum requirements that will flag an application before it gets to this point, but once it’s accepted, here are some of the things analysts look for:
- The business owner’s FICO score: This happens via a soft pull on their credit—a hard pull is only initiated when the owner agrees to an offer.
- The last 3 bank statements: This is to make sure that the business makes at least $10,000 a month in revenue—the last three months should have an average of $10,000.
- Past due amounts: If businesses have more than a handful of bills that were 90 days overdue, BlueVine will dock points from your application.
- Web presence: Social media profiles or reviews on Yelp are all up for review, to ensure the business is real and has a presence online.
- Ownership: The applicant for a loan has to be an owner of the company, though it doesn’t matter if that ownership stake is minimal. Proof of ownership may be required.
- Tax liens or existing funding: If they have a lien or existing funding with another lender, BlueVine can only offer up to $20,000 in funding.
- NSFs: Instances of the business not having enough money in their checking account to cover transactions results in a “Non-sufficient funds” alert. An applying business can’t have more than 2 separate days of NSFs in a current month, or 5 separate days in the past three months. BlueVine requires weekly repayments and doesn’t want to be shorted when the time comes to pull funds.
Does all of this take place online?
Part of the underwriting process is a quick phone call with a BlueVine analyst, for two reasons.
One, they need to make sure the business owner is a real person.
Two, they use the call to ensure that the client knows what BlueVine offers, and that BlueVine knows what the client is looking for, what their needs are and how they can best help them.
The analyst may also ask for additional paperwork, or will even finish up the underwriting process over the phone and propose a line of credit offer for the business owner to consider. They can even get started on making the first draw against the line of credit over the phone. Every underwriting process is different, however.
Note: The analyst that is assigned to your case will be your point of contact throughout your entire line of credit application experience. From the time you begin your application (assuming you start but don’t finish it) to the time you get approved and an accept an offer, one specific representative will follow up and be available to you if you have questions or concerns at any time.
I’ve been approved for a line of credit—now what?
You’ll be informed over the phone or by email that you’ve been offered a line of credit from BlueVine. Lines of credit range from $5,000 to $50,000, and while all payment schedules operate on a six-month timeline, the exact rates vary case-by-case. If you decide to accept the offer, you’ll set the wheels in motion for funding.
Now, to learn more about how to use and repay your new line of credit—including how to improve your terms if you’re offered a bit less than what you were hoping for—check out part three of our BlueVine series (coming soon!).
Underwriting is pretty painless with BlueVine. If you wake up on Monday morning with the need for an infusion of capital, you can set yourself to receive funds as quickly as Tuesday.
If your business is strong and healthy, with a good outlook—but just need some help in taking advantage of a great deal on inventory, or in jumpstarting a digital marketing campaign—be prepared to put your new source of funding to work right away.
The post Tired of Agonizing Waits? Learn About BlueVine’s Quick Process appeared first on Fundera Ledger.
from Fundera Ledger https://www.fundera.com/blog/2016/11/09/bluevine-part-2