Customer Credit Approval Checklist

The packet should include the credit application, a blank W-9, the master sales agreement, and ECOA Regulation B notice. The credit clerk sends via the customer portal or e-signature; do not accept emailed PDFs as final — Reg B requires a clean audit trail of what was received and when.

Confirm every required field is populated — incomplete trade references and missing TIN are the two most common reasons applications stall. The W-9 drives 1099 vendor classification later; do not skip it even if the customer pays by ACH.

Compare the requested credit line against the customer's projected first-year purchase volume from sales. Lines requested at more than 90 days of expected sales are a yellow flag worth a conversation with the rep before bureau spend.

Screen the legal entity name, all listed officers, and any guarantors against the OFAC SDN list and your jurisdiction's denied-parties list. A single hit blocks the file until cleared by counsel; document the search even when clean.

Pull the Secretary of State filing for the state of incorporation. Confirm the legal name on the application matches the SOS record, the entity is in good standing, and the signatory has authority. Sole proprietorships filed under a DBA need the assumed-name certificate too.

Sole proprietors carry no corporate veil; the PG is the only meaningful recourse. Send the PG form along with a request for the principal's SSN authorization to pull a consumer credit report — required under FCRA for any individual underwriting.

Order the D&B PAYDEX, Experian Intelliscore, and any UCC filings on the legal entity. Note any judgments, liens, or collections within the past 24 months — these override a clean bank reference. Save the reports to the customer file; they are part of the FCRA audit record.

Ask each reference for high credit, current balance, terms granted, and whether any balance is past due. References hand-picked by the customer almost always rate them well — weight them against the bureau payment trend, not in place of it.

Banks typically respond only in ranges (low/medium/high four/five/six figures). A medium-five-figure average on a customer requesting a $250K line is a structural mismatch worth flagging in the recommendation memo.

Tie the balance sheet and P&L to the most recent tax return where possible. Internally-prepared statements without compilation, review, or audit are accepted but downgraded — note the assurance level (or lack of it) in the credit memo.

Compute current ratio, quick ratio, debt-to-equity, and interest coverage. Compare to industry medians (RMA Annual Statement Studies is the standard reference). A current ratio under 1.0 or D/E over 3:1 in non-capital-intensive industries is a hard flag.

If the customer's own AR aging is in the file, look at concentration — a top customer at 40%+ of receivables means our credit risk is really their largest customer's risk. Request the aging if it is not already attached.

Anchor the recommendation to documented capacity: typically the lower of 10% of tangible net worth or 1.5× projected monthly sales. Default terms are Net 30 with 1%/10 prompt-pay discount; deviations require committee sign-off in the next step.

Anything above the controller's standing authority (commonly $50K) goes to committee. The package: bureau reports, financials, ratio sheet, references summary, recommendation memo. Capture the decision below — downstream branches depend on it.

Conditional approvals typically require one of: a personal guaranty, a UCC-1 filing on receivables or inventory, a letter of credit, or a deposit. Draft the security document, file the UCC-1 with the SOS where applicable, and attach proof of filing before releasing the line.

Regulation B (12 CFR 1002.9) requires written notice within 30 days of a completed application. The notice must state specific reasons (not generic phrasing), name the bureaus consulted, and include the FCRA disclosure. File the notice copy in the customer record for the seven-year retention period.

Both parties sign through DocuSign or the equivalent. Verify the customer signer matches the SOS authority confirmed earlier — a sales rep signing for the customer is not enforceable. Save the executed PDF and the audit certificate to the customer record.

Create the customer record with the approved credit limit, payment terms, billing address, tax exemption certificate (if applicable), and 1099 status from the W-9. Configure the credit-hold rule so orders over the limit route for AR review automatically.

Send a single email to the account rep, the AR clerk, and the customer's AP contact: approved limit, terms, remit-to, and the 90-day review date. Diary the next credit review at 12 months or sooner if the line gets fully utilized.