> For the complete documentation index, see [llms.txt](https://quantixfinance.gitbook.io/quantixfinance-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://quantixfinance.gitbook.io/quantixfinance-docs/credit-lifecycle/screening-diligence-and-underwriting.md).

# 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.