Screening, Diligence, and Underwriting

This is the stage that determines whether a loan happens and on what terms. Once an application reaches the right delegate, it moves through a structured underwriting process rather than a single approval decision:

1. An in-depth financial and business review of the borrower — cash flow, balance sheet composition, revenue sources, and operating history, examined in enough detail that the decision rests on the business itself rather than on the collateral alone.

2. Analysis of the key metrics and risk mitigants specific to the credit — the factors that matter for this particular facility and this particular borrower, not a generic checklist applied uniformly across unrelated credit types.

3. A sector and market analysis to place the borrower in context — how the borrower's business performs relative to its peers and its market, since a metric that looks strong in isolation can look very different once benchmarked.

4. Review of a due-diligence questionnaire, with follow-up meetings — direct engagement with the borrower to close gaps the paperwork alone doesn't answer.

5. Application of an internal risk scorecard — a consistent framework the delegate applies across borrowers, so outcomes reflect a repeatable standard rather than case-by-case judgment alone.

6. Establishment of ongoing reporting and monitoring for the life of the facility — the cadence is set by the delegate for each facility based on its risk profile, with monthly financials as the typical baseline.

7. Completion of KYC and execution of the Master Loan Agreement — the borrower's identity is verified and the terms become a binding legal obligation before any capital moves.

The output is a credit decision and, where the decision is positive, a proposed structure for the facility. Underwriting is the delegate's own work and the delegate's own risk: the first-loss capital committed against these decisions belongs to the delegate, not to lenders or the protocol. That is the mechanism that keeps the scorecard honest — a delegate who underwrites carelessly is the first to absorb the consequences of it.