Sprint Notes · No. 01
What we look for in a file
Plain talk on the documents we read and what we are actually checking for.
Published May 11, 2026 · 4 min read
Every funded loan starts as a stack of documents on a desk. Bank statements, tax returns, a debt schedule, an application, sometimes a P&L and a balance sheet. The owner sees a checklist. The underwriter sees a story being told in three different languages, and the job is to read each one and decide whether they agree.
We are a direct lender. The person reading the file is the person who can approve it, and the person who approves it has skin in the outcome. That changes how we read.
Bank statements are about rhythm, not just income
Most owners think the underwriter is adding up the deposits and dividing by three. We are doing more than that. We are reading the file for rhythm — how many deposits hit per week, how stable the ending balance is, how often it brushes zero, how often there is an NSF, how the daily cash position moves through a normal month. A business that averages $80,000 in monthly deposits with two NSFs and a balance that touches $400 every other Thursday is a different file than one that averages $80,000 with a steady $25,000 cushion. The dollar number is the same. The risk is not.
Tax returns verify what the statements suggest
Bank statements tell us what is happening right now. Tax returns tell us what happened over a full year, after accounting decisions, depreciation, and one-time items washed through. We use the returns to verify that the picture the statements paint holds up across the cycle. If the statements look like a $1M-revenue business and the return shows $400K, we want to understand why before we lend.
The debt schedule is how we model after our payment
A debt schedule is not a formality. It is the document we use to calculate what the cash flow looks like after our payment is added to the stack. Existing debt service is real money leaving the operating account every month. If we are adding our payment on top, we have to know that the business can carry the new total — not on the best month, but on a normal one. A file with three high-cost advances already running can be funded, but it has to be funded in a way that consolidates the burden, not adds to it.
The owner conversation is the most important input
Numbers say what. Conversation says why. A 20-minute call with the owner usually tells us more about the deal than the first read of the file. Why is revenue down in March? What changed when the second location opened? Why is the AR aging report leaning heavier than it was last year? Is this expansion something the owner has been planning for two years, or something the owner decided last week? The numbers do not answer those questions. The owner does.
“We can underwrite a clean file. We can underwrite a messy file. What we can't underwrite is a hidden file.”
What we want to see, plainly
We want to see how the business actually runs. We want the same picture from the bank statements, the tax returns, the debt schedule, and the conversation with the owner. When all four agree, the file gets approved. When they disagree, we ask questions until we understand the gap — and most of the time the gap has a real answer. The deals we walk away from are the ones where the gap turns out to be something the owner did not want us to find.