Need Credit? How the Underwriting Process Works with InterNex
Everything is faster—that’s perhaps the biggest upside all the technological advancements in recent years. This extends even to the time spent waiting on small business loan applications: What used to take weeks or months is now measured in days, or even hours. InterNex Capital, an online alternative lender based out of New York, says their underwriting period can take as little as 24 hours.
If you read the first part of our series on working with InterNex, you know that this collateralized, asset-based lender offers a revolving line of credit that ranges from $250,000-$5,000,000. That’s a range that not a lot of other lenders are addressing, so if you’re a small or mid-sized business owner who needs that amount of working capital, meet with a strategic partner (such as Fundera) or call InterNex directly to get an application started.
Prep for a Rapid Review
Once InterNex has your application in the system and you’re pre-qualified for a line of credit (pre-qualification can take less than an hour), the next step is underwriting. This is standard for nearly every lender: The underwriting process involves the lender’s team reviewing your business—they want to confirm you’re a healthy option for them to extend a revolving line of credit to.
What goes into the InterNex underwriting process, and what will you need to prepare for? Here’s a quick rundown:
How does a small business owner enter the underwriting stage?
InterNex has a unique application process—its main channel for connecting with potential borrowers is through strategic partners, such as CPAs. Prospective applicants can also call up InterNex directly to begin an application, but most are entered into the system through a third party.
Eventually, InterNex will have an online form that business owners can fill out themselves, according to Director of Marketing Simrita Singh.
As it stands now, your application will be received through InterNex’s online portal and includes basic client information, financial statements, and the most current aging reports. (Visit part 1 for more information on minimum requirements and other needed documentation.) If everything meets pre-qualification standards, the application moves into underwriting.
What is involved in InterNex’s underwriting process?
Your application ends up in the hands of an underwriter who will follow your deal to completion. They analyze all the information you provide with the help of InterNex’s credit-scoring algorithms. Some of the things the underwriter reviews include:
- Concentration risk: Applicants who get all of their receivables from one client are a red flag that they could get into easy trouble. If that one client doesn’t pay up, then how will you be able to make good with InterNex? You’re more likely to get a line of credit offer if you have a diversified client base.
- Due diligence: InterNex checks with LexisNexus, a common tool for verifying the identity and validity of a client. It’s one of the ways they quicken the onboarding process.
- The general health of your business and those you do business with: For example, if your business has a lot of invoices that are 90 days past due, that’s a pretty fair indication that you’re not getting paid on time and will have a hard time doing the same for your revolving line of credit.
Everything gets done online and internally at InterNex. And that means a quick turnaround for you—you’ll get an update on your status within 24 hours.
“There are no on-site visits as well as no due-diligence fees for the research we do,” confirms Singh.
What else needs to happen before your line of credit gets approved?
Once the underwriter is ready to make a decision, they’ll check in with you to walk through the analysis process, obtain any additional financial documents they need from you (such as earlier years’ tax returns), and answer any of your questions.
The final step is to submit the deal to the credit authority for a final decision. This can all happen in about 24 hours, though it may take a little longer if your request needs further vetting. Otherwise, you’re on the way to a line of credit that will renew annually and grow with your cash flow needs.
For more on that, including how to receive your funds and the terms of an InterNex loan, be sure to finish up with part 3 of our series on working with the alternative lender.
The underwriting process with InterNex is a relatively painless procedure, assuming your business is in good health and simply needs cash to shore up the gap between billing your clients and receiving their payments. This is a common issue for lots of businesses that invoice their clients, so take a look at this option when you feel that gap straining your ability to operate effectively. You might also consider the pros and cons of taking on multiple loans at once, if you’re feeling bold.
You can contact him at ericgoldschein.com, or on Twitter at @ericgoldschein.
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