Key Success Element #1 – Lender Compliance

Lender compliance is a series of approval guidelines which lenders have selected as part of their decision-making process. Typically, these are items that can be easily verified in an automated environment. What this means is that when you submit a business loan application the lender’s computer system will check these lender compliance items to see if your business will make it to the next level in the loan approval process.

Lender compliance items generally do not get you approved, but they can get you declined if your entity has not completed them before you apply.

Here are a few examples of lender compliance items:

• Business Address – Lenders verify your address against USPS databases. Residential addresses often result in declines.
• Business Phone Verification – Your number is checked through FCC databases to confirm it is listed as a business line.
• Business Entity (LLC/Corp) – Without a registered entity, lenders treat the application as personal rather than business.
• Business EIN – Lenders confirm your EIN is active and matches your legal business name.
• Good Standing Status – Your entity must remain active and compliant with your Secretary of State.

There are about 20 lender compliance items that your business needs to complete. They are all easy to complete and most have a free or low cost solution.

Most lenders do not check all 20 items, but you don’t know which ones they will check. 
That means the safest approach is to complete them all. Lenders rarely disclose which compliance items caused a decline, and the representatives you speak with typically do not have visibility into those decisions. These checks are built directly into automated underwriting systems. So it is up to you to get those items completed before you apply.

By running a business success scan you will see all lender compliance items and how to complete them.