You are trying to close a business loan. The lender says you have to pass a bank verification, very often a DecisionLogic check.
How to Pass a Bank Verification for a Business Loan:
Call 919-771-4177 for more info.
STEP 1: Total Deposits:
Don’t get declined for failing a bank account verification or Decisionlogic to get a business loan or a Cash Advance. Total Deposits. Look at the total deposits into your business checking account for the current month.
You want the dollar amount to be on track for the current month or not more than about 25% less than the average for the last 4 months. If it’s much more than that your offer may be reduced or declined.
STEP 2: (Part 1) Minimum Balance
TIP: Know the minimum amount you need to have in your account at the time of the bank verification or decision logic. Often it’s a multiple of the payment, either daily, weekly, bi-weekly Or monthly.
Example: If your payment is $90 per day 5 days a week, then the minimum you should have in your account is about $270 for a cash advance and many other business loans. If the payment is $500 per week, then you should have at least $500 in the
business account but better $1,000 or more. If the payment is $1,000 a month, then you should have at least $1,000 but
Better $2,000 or more in the account.
TIP: If you do not have the minimum amount needed to close, it is better to wait few days or longer until you do, or you may be declined right before closing.
STEP 2: (Part II) Overdrawn: video says step 2
Review recent overdrafts for the last 4 months in your account. Your account should not be overdrawn at the time you do the bank account verification or Decisionlogic, your business will be declined if you are.
TIP: If you are overdrawn, you must wait until the account has a positive balance. If you’ve recently been overdrawn more than 2 or 3 days in a row, the lender may decline for that reason.
TIP: If your business account was overdrawn a total of 5 days or
More per month during each of the last 4 months, that may trigger a decline.
Step 3: Review NSF’s for the last 4 months in your account.
TIP: NSF’s: Also known as insufficient funds are charges that were rejected by your bank or debits that were paid but overdrew the account.
TIP:
STEP 4: Complete
TIP: If you pass, this is often the last step. In some cases, final verifications of the business and owners are completed. If it is the last step, you will be funded.
A Failed Bank Verification is #3 in the Top 9 reasons your MCA was declined.
What is DecisionLogic? DecisonLogic is a company that many lenders use to verify a bank account and it’s activity. They review the current month to date , recent negative days or overdrafts, the current and average balance, and other factors. If you have recently opened a new business checking account, let the lender know. Apply Below now!
How to Pass a DecisonLogic Bank Account Check:
Have at least 2 to 3 times the new payment available.
No negative days, NSF’s or Overdrafts in the last week and less than 5 in any of the last 3 months.
Recent average numbers should be strong.
No new loans taken out in the current month.
Review
1. 3 Times the Loan Payment.
The current balance must be positive. An overdrawn will result in an immediate decline.
At the time of the check, have at least 2 to 3 times the amount of the new payment. If you do not, you may be declined. Do not move forward with the review with less than twice the new payment. For more info on how to successfully get a loan of this type, you can watch the How to get a Bank Statement Loan Video.
For Example:
If the new payment is $400, then you should try to have $800 to $1,200 available to help insure you will pass a Decisionlogic verification. If you have less, it puts the closing at a higher risk and your recent activity will then be very closely reviewed in the decision process.
2. No Negative Days.
The most recent week should have no negative days. On statements they usually appear towards the end of the statement.
Don’t worry too much. Any in the last week will not automatically result in your approval being reversed and declined. One overdrawn for a small amount and NSF will often be overlooked. If you had more than one overdrawn day, the risk of a reversal of the approval increases. You want a maximum of 5 total negatives in any of the last 3 months bank statements to get funding.
3. Strong Average Balances
The current month’s average daily balances should be strong. The amount depends a lot on your overall business sales and any new debt. For smaller businesses getting less than $25,000, it can be as low as $1,000 and still be approved. Pay close attention to this if your business has had recent low sales.
Businesses with higher annual revenues must have higher average balances in their checking account.
Lenders look at this number to help them decide if the business will have the cash flow to handle expenses and all required payments. Strong average balances will help you successfully pass a decisionlogic review.
4. No New Loans
Your business should not have taken out any new loans during the last 30 days. The lender can see any new debt through the end of the previous month, but not the current month.
Did you take out a new loan in the current month? Approvals will be re-evaluated if you have taken out a similar loan since the 1st of the month. .
Call 919-771-4177 for more info.
FAQ: How to pass a DecisionLogic Check:
What is a Decisionlogic check?
The lender securely reviews the current and most recent cash flow in your business checking account. They use that information as part of their final closing items to decide if the loan will close and fund.
What can I do after failing DecisionLogic?
Talk to the lender. Try to find out as much as you can about why you did not pass the account verification review. Also ask if you can wait a few days and try DecisionLogic again. Some declines are based on low balances and very recent NSF’s.
New deposits coming in during the week along with a clean account can change a decline back into an approval.
How do I pass a DecisionLogic check?
Discuss with the lender in advance what will be required for you to pass. They may not tell you but find out as much information as you can. If you are not given the criteria, tell them what your current and recent balances are and ask if that will be good enough to pass and close the loan.
Conclusion
If any lender wants to do an account verification such as Decisionlogic, ask beforehand what they are looking for and also what will be required for your request to be completed and funded.
If you fail DecisionLogic, ask if you can try it again after you make substantial deposits or overcome the obstacles that caused the verification to fail. These 2 main ways should allow you to overcome the verification hurdle and get funding!