Funding Readiness
The state of having credit, financials, documentation, and compliance in place to qualify for the next-tier funding product.
Funding readiness is binary at the underwriter's desk — the file either has the data the lender requires or it doesn't. CloudsCreditRepair™ scores readiness against the specific funding products the member is targeting.
5 C's of Credit
Character, Capacity, Capital, Collateral, and Conditions — the framework lenders use to evaluate borrowers.
Every funding decision maps to the 5 C's. Strong personal and business credit cover Character; financials cover Capacity and Capital; assets cover Collateral; macro environment is Conditions.
Underwriting
The lender's evaluation of risk against approval criteria for a specific credit product.
Underwriters look beyond score — at bank statements, tax returns, ownership, industry, time in business, and revenue patterns. Funding readiness optimizes every input before the application is submitted.
Bank Statement Underwriting
Approval based primarily on 3-12 months of business bank statements showing revenue, deposits, and balance trends.
Used by MCA, revenue-based finance, and many fintech lenders. Average daily balance, deposit count, and NSF count are key factors.
Average Daily Balance
The mean end-of-day balance in a business operating account over a defined period.
Lenders use 30-90 day averages to size lines of credit and working capital advances. CloudsCreditRepair™ coaches members to optimize this number 60-90 days before applying.
NSF (Non-Sufficient Funds)
A bank event where a transaction is declined or overdrawn due to insufficient balance.
NSF events are a top reason for funding decline. Three or more NSFs in 90 days typically disqualifies a file from prime working-capital products.
Time in Business (TIB)
The number of months the business has been operating since formation or first revenue.
Most prime lenders require 24+ months TIB. SBA and bank lines often require 24-36+. Many fintech products start at 6 months.
Working Capital Loan
Short-term financing used to fund day-to-day operations rather than long-term assets.
Term, MCA, lines of credit, and revenue-based products all serve as working capital. Pricing varies widely based on credit quality and product type.
Line of Credit (LOC)
A revolving credit facility the business can draw from up to a stated limit and repay repeatedly.
Business LOCs are the most flexible working-capital tool. Bank LOCs typically run 7-13% APR; fintech LOCs 18-35%. CloudsCreditRepair™ targets bank-tier LOC access as a funding milestone.
Merchant Cash Advance (MCA)
A purchase of future receivables — not a loan — where the funder collects a daily or weekly percentage of revenue.
MCA is the fastest funding option but the most expensive (factor rates 1.18-1.49). Stacking multiple MCAs is a common cause of business failure and CloudsCreditRepair™ discourages it.
Factor Rate
The MCA pricing format — total payback divided by amount funded, expressed as a decimal (e.g., 1.35).
A 1.35 factor on $100,000 = $135,000 payback. Convert to APR for accurate comparison against term loans and LOCs.
SBA Loan
A loan partially guaranteed by the US Small Business Administration through a participating lender.
SBA 7(a) and 504 are the most common. They offer longer terms and lower rates than conventional small business loans but require strong personal and business credit, financials, and a complete documentation package.
Funding Stack
The total set of credit and capital facilities a business uses, sequenced for risk and cost.
Healthy stacks lead with low-cost bank debt and supplement with revolving lines; weak stacks lead with MCAs that compress cash flow.
Pro-Forma Financials
Projected income statement, balance sheet, and cash flow used in funding applications for newer businesses.
Required for most SBA applications and startup funding. Must be defensible against assumptions a banker can challenge.
Debt Service Coverage Ratio (DSCR)
Net operating income divided by total debt service — measures ability to cover debt payments.
DSCR > 1.25 is the typical bank floor for term loans and SBA. Below 1.0 means the business can't cover debt from operations.
Loan-to-Value (LTV)
The loan amount divided by the appraised value of the collateral.
LTV is central to secured business loans, equipment financing, and real estate-backed funding. Lower LTV = lower risk = better pricing.
Funding Source
A specific lender, bank, fintech, or capital provider matched to a borrower's profile.
CloudsCreditRepair™ maintains a member-facing funding source matrix matched to credit tier, revenue, industry, and time in business.
Personal Credit Cutoff
The minimum personal FICO score a lender requires for funding approval.
Most prime business products cutoff at 680; SBA generally at 680-700; bank LOCs at 700+. Member readiness reports show distance to each cutoff.
Turn these definitions into a working plan.
Members get tri-bureau credit analysis, a personalized roadmap, business credit setup, and funding readiness scoring inside one AI-powered command center.