SBA loan underwriting, from package to signed memo.
SBA underwriting software collects a 7(a) or 504 package, checks the documents, spreads the financials and tests the file against the lender's credit policy. Kita does that work end to end and drafts a credit memo with every figure cited to its source, and your underwriter makes the decision.
What does SBA loan underwriting involve?
It means showing that the business can repay from cash flow and that the file meets SBA's requirements as well as your own credit policy. Most of the work is reading a long package and checking each document against the others. Kita reads each of these.
SBA forms
SBA 7(a) and 504 applications, SBA Form 1919 borrower information forms and personal financial statements.
Business tax returns
Form 1120 and 1120-S, Schedule C, K-1s, 1065 partnership returns and quarterly 941s.
Business financials
P&L statements, balance sheets, cash flow statements and accounts receivable aging.
Bank statements
Business checking and savings statements from national banks, regional banks and credit unions.
Entity documents
Articles of incorporation, operating agreements, EIN verification and business licenses.
Change of ownership
Full acquisition packages, including the cash proof the 2026 rules ask for.
How does Kita underwrite an SBA loan?
Kita runs the same five steps on every SBA file, from collecting the package to a cited credit memo, and your underwriter decides.
Collect the file
The AI Credit Officer messages the borrower on WhatsApp, SMS or email, asks for the exact documents an SBA package needs, checks each upload as it lands and follows up until the file is complete.
Check every document for fraud
Kita Capture reads tax returns, bank statements and SBA forms in any format, including scans and photos. It flags tampering and forgery patterns and catches contradictions across the file, such as income that one document reports and another does not support.
Spread the financials and read the risk
Statements, general ledgers and bank data become a normalized period-over-period spread, with debt service coverage, margin, debt service and trend computed in one pass. Kita then reads what the spread alone does not show, such as customer concentration or margins falling period after period.
Draft the memo against your policy
The file is held against your encoded credit policy, and anything outside it is flagged, never waved through. The AI Underwriter drafts the credit memo with every figure cited to the document line it came from.
Your underwriter decides
Your underwriter reviews work that is already done and signs the decision. The application, documents, checks and decision stay in one system of record, or go into the loan origination system you already use through the API.
What do SBA underwriters check?
They check repayment from cash flow first, then the parts of the file that SBA adds to ordinary credit analysis. These are the terms that come up on almost every file.
Debt service coverage
Cash flow available for debt service divided by the loan payments. For change-of-ownership loans under SOP 50 10 8.1, SBA sets 1.25:1 for an initial acquisition and 1.15:1 for a business expansion.
Global cash flow
The business's cash flow combined with the guarantors' personal income and obligations, so the lender sees whether the owners can carry the loan along with the company.
Equity injection
The borrower's own money in the deal. Lenders verify where it came from, usually by tracing it through bank statements.
Credit elsewhere
SBA guarantees loans only to businesses that cannot get credit on reasonable terms from non-federal sources, and the lender documents that test in the file.
Personal financial statements
Each owner's assets, liabilities and income. They feed the global cash flow and show what stands behind a personal guarantee.
Cash proof
A reconciliation of bank statement data to the income statement and tax return for each period. Under SOP 50 10 8.1 it is part of every Quality of Earnings report, which SBA requires for initial acquisitions and business expansions priced at $3 million or more.
What the October 2026 change-of-ownership rules mean for the file is covered in the new SBA acquisition rules, explained for lenders. Kita prepares and reconciles that file. It is not a valuer and does not write the Quality of Earnings report.
Who makes the credit decision?
Your underwriter does. Kita drafts and explains the analysis, holds the file against your credit policy and records every check, and a person on your team signs the decision.
Every figure links to the document line that produced it.
Your thresholds and required checks, encoded once, applied always.
The AI drafts and explains. A human makes every decision.
Every repayment and default sharpens the next recommendation.
API-first. Integrates into your existing LOS, credit engine or custom workflow.
SOC 2 Type II compliant and ISO 27001 certified.
Kita underwrites other loan types with the same method and your policy for each product: Commercial real estate underwriting, Equipment finance underwriting, Working capital underwriting, and the rest on the loan underwriting software page.