Glossary · underwriting

Eligibility criteria

Also called credit box, funding requirements, minimum requirements.

The published and unpublished conditions a file must clear before a funder will consider it: time in business, revenue, industry, state, credit, and what is already collecting from the account.

Drafted with AI assistance. Not yet independently checked. Nobody has verified the claims on this page against a source, so treat the figures and legal points as a starting point rather than as settled, and confirm anything you are about to act on. How we check things.

What it means

Every funder runs a credit box, and most of it is not published. The recurring dimensions:

  • Time in business, measured from formation or from the first business bank account, which are not always the same date
  • Revenue or deposit volume, usually as a monthly average across recent statements
  • Industry, with restricted lists that commonly include cannabis, firearms, adult content, crypto, gambling, some collections and lending businesses, and in many boxes trucking, staffing and construction because of their receivable and cash flow profiles
  • State, where licensing or disclosure regimes make some jurisdictions unattractive to a given funder
  • Personal credit of the guarantor, and whether there is an open bankruptcy, unsatisfied judgment or unresolved tax lien
  • Existing positions, meaning how many other funders are already debiting the account

The SBA layer is different in kind: size standards, the credit-elsewhere test, eligible use of proceeds, and ineligible business types are program rules, not preferences, and no lender can waive them.

Where this one catches people

"Pre-qualified" and "pre-approved" in marketing mean a file passed a filter, usually consisting of a stated revenue figure and a soft credit pull. Nothing is real until an underwriter has read actual bank statements and issued a conditional approval naming the amount, the cost, the collection schedule and the stipulations. Businesses that plan around a pre-approval, and brokers who let them, produce most of the disappointment in this market.

Read next

Credit boxThe set of parameters defining which files a funder will approve, covering time in business, revenue, credit,… Credit elsewhere testThe SBA eligibility condition that the applicant could not obtain the credit on reasonable terms from non-fed… Pre-approvalA non-binding indication of what a funder might do based on limited information, subject to full underwriting… Restricted industryBusiness types a funder will not fund at all, maintained as an internal list keyed to industry codes and driv… StipsThe documents and conditions an underwriter requires before an approval turns into funded money — the list th… Time in business (TIB)How long the business has been operating, measured by the funder from a date it can verify — usually entity f…

Eligibility criteria — common questions

What does eligibility criteria mean?

The published and unpublished conditions a file must clear before a funder will consider it: time in business, revenue, industry, state, credit, and what is already collecting from the account.

Where does eligibility criteria catch people out?

"Pre-qualified" and "pre-approved" in marketing mean a file passed a filter, usually consisting of a stated revenue figure and a soft credit pull. Nothing is real until an underwriter has read actual bank statements and issued a conditional approval naming the amount, the cost, the collection schedule and the stipulations. Businesses that plan around a pre-approval, and brokers who let them, produce most of the disappointment in this market.

Is eligibility criteria the same as an interest rate?

Eligibility criteria is defined above; if you are comparing it against a rate, check whether the two measures share a time dimension before you put them side by side.

Which products does eligibility criteria apply to?

It is not specific to one product — it appears across the market.

Is there a worked example of eligibility criteria?

Not on this entry. Where a term is arithmetic, the arithmetic is shown; this one is not primarily a calculation.

What else should I read alongside eligibility criteria?

Credit box, Credit elsewhere test, Pre-approval, Restricted industry, Stips.

Has this definition been checked?

Not yet. This entry is drafted and live, and the notice at the top says so. Confirm anything you are about to act on.

Is this legal advice?

No. It is a definition. What a clause does in your contract, in your state, is a question for a lawyer licensed where you are.

Can I suggest a term?

Yes — [email protected]. The glossary grows from what people are actually shown in contracts.