a laptop screen that reads "underwriting" a commercial loan

AVANA CUSO Answers a Popular Question: “What is Underwriting a Loan?”

As a commercial real estate lender, AVANA CUSO is no stranger to the loan underwriting process—a major step toward getting approved for a loan. AVANA CUSO is proud to say it has more than 20 years of experience producing efficient and accurate deliverables. This means that we’re a competitive and collaborative commercial real estate lender, who mitigates risk by executing thorough reviews and due diligence to conform to regulatory requirements.

As such, AVANA CUSO is often asked key questions about loan underwriting, including the following:

What Is Underwriting a Loan?

Underwriting a loan is one of the final steps of the loan approval process. During underwriting, the lender will verify various financial information, including income, assets, debt, credit score, credit history, tax returns, bank or credit card statements, property, pay stubs and additional documents. The underwriter will also assess the property you intend to buy and associated documents, such as appraisals or inspections. A commercial mortgage underwriter is a financial expert tasked with reviewing your finances and assessing the risk the lender will take on if they approve your loan. The underwriter typically works with you through your loan officer.

How Often Does an Underwriter Deny a Loan?

Whether or not your loan is denied in underwriting typically depends on your overall financial health and circumstances. Several major reasons your loan may be denied include:

  • Insufficient Net Income
  • Low Personal and/or Business Credit Scores
  • Low Appraisal and High Loan Amount Ask
  • Inadequate Personal and/or Business Collateral
  • High Debt-to-Income Ratio
  • Property Issues

What Are the Potential Loan Underwriting Process Outcomes?

The loan underwriting process can produce four possible outcomes.

  1. Denial: When your commercial mortgage application is denied, you will not be able to get the loan. If this occurs, find out the reason for the denial so you can make adjustments to your finances. When you improve your credit score or pay down your debt, for example, you can reapply for a loan.
  2. Suspension: If your loan application is suspended, it generally means documents were missing from your file. In such a case, the lender will likely tell you if you can reactivate the commercial mortgage underwriting process by submitting additional information.
  3. Approval With Conditions: Some approvals can be conditional. Lenders may ask you to provide business licenses, tax forms, insurance or other documentation before officially granting the loan.
  4. Approval: An approval means you’ll receive the loan to buy the property or make adjustments to a current commercial property.

How Long Does Loan Underwriting Take?

Business loan or commercial mortgage underwriting typically takes longer than home loan underwriting. The process can take as little as two to three weeks, but usually takes 30 days or more. Business or commercial real estate loan applicants should receive their final decision one month after submitting their application.



Established in 1998 and headquartered in Simi Valley, CA, AVANA CUSO offers competitive and collaborative commercial real estate loans. We partner with credit unions and connect them to investors across the United States. Additionally, we uniquely support and guide our partners through the entire full lifecycle of the loans from application to loan underwriting to approval, supporting credit unions and their borrowers through the complex process. AVANA CUSO is a proud member of the AVANA Family of Companies.