Scoring Methodology & Underwriting Logic Center
Complete transparency into our deterministic evaluation algorithms, Five C's weighting architecture, risk tier classifications, and compliance safeguards.
All primary underwriting ratios (DSCR, LTV, DTI) and Five C's point totals are calculated using deterministic mathematical algorithms in application code, never approximated by language models.
LendEval never requests Social Security Numbers, Employer Identification Numbers, or credit bureau records. Users test scenarios freely without affecting their personal or commercial credit files.
Our educational benchmarks reflect published guidelines from the Federal Reserve, OCC, FDIC, and SBA SOP 50 10, adhering to Fair Housing and Equal Credit Opportunity standards.
The 5-Pillar Weighting Architecture
Every loan evaluation distributes 100 possible readiness points evenly across the Five C's framework (20 points maximum per pillar):
1Character (20% Weight • 0–20 Points)
Scored based on self-reported FICO band (720+: 20 pts, 660–719: 15 pts, 600–659: 10 pts, <600: 5 pts) and industry experience tenure.
2Capacity (20% Weight • 0–20 Points)
Real Estate: Debt-to-Income ratio (DTI ≤ 36%: 20 pts, 37%–43%: 15 pts, 44%–49%: 10 pts, ≥50%: 5 pts). Business: DSCR (≥1.35x: 20 pts, 1.20x–1.34x: 15 pts, 1.05x–1.19x: 10 pts, <1.05x: 5 pts).
3Capital (20% Weight • 0–20 Points)
Real Estate: Down payment percentage (≥25%: 20 pts, 20%–24%: 15 pts, 15%–19%: 10 pts, <15%: 5 pts). Business: Liquid assets relative to loan size.
4Collateral (20% Weight • 0–20 Points)
Evaluated via Loan-to-Value (LTV ≤ 65%: 20 pts, 66%–75%: 15 pts, 76%–80%: 10 pts, >80%: 5 pts) and asset property type or business collateral value.
5Conditions (20% Weight • 0–20 Points)
Loan purpose (purchase/expansion: 20 pts, rate-term refi: 15 pts, cash-out/working capital: 10 pts) and industry risk rating.
Lender Risk Tiers Classification
Prime Bank Ready
Strong underwriting profile across all five pillars. Qualifies for lowest market interest rates, minimum required equity, and conventional commercial bank execution.
Standard & SBA Ready
Eligible for SBA 7(a), SBA 504, or regional commercial bank term facilities. Minor compensating factors may be required for specific metrics.
Alternative / Bridge
Fails conventional bank guidelines on one or more pillars. Best suited for non-bank private lenders, bridge loans, or community development financial institutions (CDFIs).
Pre-Application Stage
Borrower needs structural preparation before applying. Application without remediation carries a high likelihood of credit denial.
Dual-Prompt AI Pipeline Architecture
When borrowers execute scenario stress-testing or portfolio analysis tools, LendEval runs a structured two-stage analysis pipeline:
Stage 1: Quantitative Draft Engine
Ingests portfolio financial entries or scenario variables. Runs financial formulas to compute IRR, Cap Rates, DSCR under stress, and generates initial risk draft hypotheses.
Stage 2: Adversarial Underwriting Audit
A second independent model evaluates Stage 1 outputs through the lens of a senior bank credit committee, stress-testing optimistic assumptions, identifying blind spots, and generating concrete action steps.
Compliance Disclosures
LendEval is an educational software tool provided for strategic planning and self-evaluation. LendEval is not a lender, loan broker, investment advisor, or credit reporting agency under the Fair Credit Reporting Act (15 U.S.C. § 1681 et seq.).
Evaluations generated by LendEval do not constitute loan approval, pre-approval, commitment to lend, or financial advice. Actual lender terms, interest rates, and loan approvals are determined exclusively by underwriting institutions following full documentation review and credit verification.