Almost every commercial lender asks for the same thing first: six months of business bank statements. Not because they are lazy, but because statements are the hardest document to dress up. A P&L is a set of decisions. Statements are what happened.
Average daily balance, not the closing balance
The closing balance on the last day of the month tells an underwriter almost nothing. What they calculate is the average daily balance across the period, because that shows whether the account genuinely holds money or simply passes it through.
A business turning over 200,000 a month with an average daily balance of 900 is a different risk to one with the same turnover and an average of 40,000. The first has no buffer. The second can absorb a late payment.
Deposit consistency and where deposits come from
Underwriters count deposits and look at their spread. Twenty deposits a month from fifteen sources reads as a durable customer base. Two deposits a month from one source reads as concentration risk, however large the numbers.
The things that quietly end an application
- Returned payments or dishonours, which are read as a direct signal about cash discipline
- Existing daily or weekly debits to other funders, which reveal debt you may not have disclosed
- Negative days, and how many of them there are in the period
- Gambling transactions, which underwriters treat far more seriously than most applicants expect
- Round-number transfers to a director account with no obvious pattern
Stacking is the one that ends everything
If your statements show daily or weekly repayments to two or more funders, most lenders will decline immediately. This is called stacking, and it signals that earlier funders are being repaid from newer borrowings. If you already have one facility, disclose it. It will be found, and disclosure is survivable where discovery usually is not.
What to do before you apply
- Pull the statements yourself and read them the way an underwriter would
- Be ready to explain any dishonour, negative day, or unusual transfer in one sentence
- Do not tidy the account for a month and then apply. The period requested will include the untidy months
- Disclose every existing facility up front, including anything on daily repayment
None of this requires better numbers. It requires knowing what your own statements say before someone else reads them to you.