Self-Underwriting: The #1 Mistake Costing Businesses Their Best Financing Options

Your biggest funding obstacle isn't your credit score or financials—it's your assumptions

In 15 years of Small Business lending, I've seen one trend consistently hurt businesses more than poor credit or weak financials: 'Self Underwriting.' Business owners talk themselves out of applying because they assume they won't qualify. When small business owners analyze their own loan approval likelihood through self-underwriting, it's dangerous—they unknowingly lose out on real opportunities.

I constantly urge clients to abandon this limiting belief. As I tell them: 'Don't stop yourself from getting something you may actually qualify for.' In Small Business Finance lenders constantly adjust their minimum requirements. Each lender underwrites with unique criteria and in this shifting landscape, business owners often wrongfully assume they're unqualifiable when they actually have viable options.

This constant flux is exactly why partnering with someone who tracks these daily changes across lenders can mean the difference between walking away empty-handed and finding the perfect financing solution.

Just because you were declined with one lender, doesn’t mean that your business is ‘un-financeable’.

Getting approved without ‘Self Underwriting’

Applicants who have been declined in the past often believe that every lender will reject their business. This couldn't be farther from the truth. While not every business qualifies for financing, this mindset speaks to a larger psychological issue—how a single decline destroys confidence and prevents business owners from exploring other options

To this point, we recently analyzed incomplete applications over the past 3 years—cases where small business owners started but never finished their applications. When we followed up with owners who eventually completed the process, an overwhelming majority said they initially abandoned their applications because they 'didn't believe their business would be approvable.

I am not talking about Merchant Cash Advance loans where the credit requirements are generally quite loose. . . I am speaking more specifically about higher tier conventional financing options, like term loan products and credit lines.

There are programs that exist to fund businesses in every situation

A New Jersey landscaper was declined for an SBA loan from his bank due to existing cash advance debt. Convinced we'd only offer another MCA (like everyone else), he was skeptical when applying with us. Instead, we secured him a $100,000 bank revolving line of credit at 8.5% annual interest. How is this possible? As a Capital Advisory firm, we know the particular bank that didn’t factor current debt servicing or any current MCA UCCs.

A Texas contractor was declined by an online lender who only offered an MCA. After multiple rejections, he lost confidence but kept searching for a bank that would approve him despite losses on his tax returns. We arranged a 10-year SBA term loan because we know which banks will **approve businesses with declared losses.**

A New York wholesale business couldn't get approved anywhere after COVID-related MCA repayment issues. That 'past default scarlet letter' made MCA funders avoid them entirely—a common problem. This owner received a $250,000 bank revolving line of credit through us.

The difference between successful funding and missed opportunities often comes down to mindset. Self-underwriting leads owners to disqualify themselves before lenders ever get the chance. The best approach? Apply, let professionals assess your eligibility, and explore every available program. You might be more fundable than you think."

Ready to see what options actually exist for your business? Stop second-guessing your eligibility and get a professional assessment. Book a call with me here or get started with our application process to discover financing programs you may not have considered.

Don't let assumptions cost you the capital your business needs to grow.