Lenders reviewing a business funding application generally ask whether the business is in good standing, whether money comes in steadily, whether it can carry another payment, what backs the request, and how the owners have handled credit. Each partner weighs these differently. Ivyview Lenders, a small-business funding broker in Greenville, North Carolina, explains them here without thresholds or approval promises.
| Standing | An active state entity record, tax registrations and any required licenses |
|---|---|
| Cash flow | Usually read from recent business bank statements |
| Capacity | Often measured with the debt service coverage ratio |
| Support | Collateral and, for many products, a personal guarantee |
| Thresholds | Set by each partner; Ivyview Lenders does not set or publish them |
Five questions behind most reviews
- Is the business real and in good standing?
- Does money come in steadily?
- Can the business carry one more payment?
- What backs the request if things go wrong?
- How have the owners handled credit before?
Every partner asks some version of these, but the weight on each differs by partner and by product. A partner financing a specific machine leans on the machine; a partner offering a line of credit leans on cash flow. The sections below take each question in turn.
1. Is the business real and in good standing?
For a North Carolina business this usually means an active record with the NC Secretary of State, tax accounts with the NC Department of Revenue where they apply, any license your trade requires and, in Pitt County, a business personal property listing filed each January. Partners also check that names line up: the entity's legal name, the bank account title and the application should match exactly.
Our North Carolina checklist covers each office in detail.
2. Does money come in steadily?
Recent business bank statements are often the single most-read document in a file, because they show what actually happened rather than what was projected. Reviewers commonly look at:
- Deposits month over month, and whether they come from customers or from transfers and loan proceeds.
- Ending and low balances, and how often the account runs close to zero.
- Overdrafts and returned items.
- Recurring debits to other lenders or funders, which reveal obligations an application may not mention.
Seasonal swings aren't a problem in themselves. Unexplained ones are. If a slow quarter, a one-time deposit or a stretch of overdrafts has a reason, write it down and send it with the statements.
3. Can the business carry another payment? Debt service coverage
Many lenders answer this with the debt service coverage ratio (DSCR): net operating income ÷ total debt service, measured over the same period. Net operating income is the cash the business generates from operations before debt payments; total debt service is every principal and interest payment due, including the one being requested.
A ratio above 1 means operating income covers the payments with something left over; below 1 means it doesn't. Each lender sets its own minimum and its own adjustments, so we don't quote one. Some lenders also calculate a global ratio that adds the owners' personal income and debts.
Our step-by-step DSCR worksheet shows where each input comes from. You need every payment in one place, so build a business debt schedule first; the loan payment calculator gives the payment on a proposed loan.
4. What backs the request?
Partners reduce their risk with collateral, a personal guarantee or both:
- Collateral is property the partner can claim on default, such as the equipment being financed or inventory. It is usually recorded with a UCC filing; see UCC liens in North Carolina.
- A personal guarantee makes an owner personally responsible if the business doesn't pay. Many business funding products ask for one from owners above a certain ownership share; the share and terms are set by each partner.
- Existing liens matter too. If a blanket lien already covers most assets, a new partner has less to rely on.
Ask before you apply what each product requires, and read the guaranty itself, not just the summary.
5. Credit: personal and business
For most small businesses, the owners' personal credit history is part of the review, often alongside a business credit report. Partners generally look at payment history, current balances and recent new debt rather than a single number in isolation, and no single score decides an application. If you know of an error or a past problem, check your reports before applying and be ready to explain it; an explanation volunteered early reads better than one drawn out later.
Ask each partner whether its review involves a hard credit inquiry before you consent to it.
What differs by product
| Funding type | Where reviews tend to focus |
|---|---|
| Working capital | Recent bank statements and the regularity of deposits |
| Line of credit | Cash flow over time, existing debt and, for larger lines, financial statements |
| Term loan | Tax returns, financial statements, debt service coverage and the purpose of the loan |
| Equipment financing | The equipment quote, the equipment's age and value, and the business's cash flow |
| Inventory financing | Inventory records, how quickly stock sells and supplier relationships |
| Merchant cash advance | Sales volume and consistency. It is not a loan; funders buy a share of future receivables |
Things that slow a file down
- Names that don't match across the state record, bank account and application.
- Missing pages or months in bank statements.
- Payments to other funders that show on statements but not on the application. Partners treat undisclosed advances seriously.
- A profit and loss statement that can't be reconciled with the deposits.
- A request without a stated purpose. A few sentences on what the money does and how it gets repaid help more than most owners expect.
Where Ivyview Lenders fits
We don't set criteria, and we won't tell you a request will be approved. What we can do is help you see your file the way a partner will, and match the request to funding types that suit it. See how the process works.
By Ivyview Lenders · Updated