Commercial credit applications: assemble the file, keep the decision with the credit team

Regulation B, which implements the Equal Credit Opportunity Act, applies to business credit as well as consumer credit. Regulation B § 1002.9 sets notification rules, and paragraph (a)(3) covers business credit applicants. For a business with gross revenues above $1 million in its preceding fiscal year, and for extensions of trade credit, it requires the creditor to notify the applicant within a reasonable time, orally or in writing, of the action taken. Businesses with revenues of $1 million or less follow different provisions. The official interpretation notes that a creditor may rely on the applicant's statement about revenue size.

I mention this not to interpret it for you but because it shapes the workflow. The system needs to record when an application became complete, what action was taken and when, and how the applicant was notified. Your counsel should define those requirements before anything is automated.

The first step is a completeness check against the company's own application requirements: legal name, entity type, address, ownership information if required, trade references, bank reference, requested limit and signed terms. The workflow lists what is missing and drafts a request for the credit team to send.

The completeness check should not make inferences about the applicant from the information provided. Its job is to say what is present and what is not.

Trade and bank references arrive by email, phone notes and forms. The workflow can track each reference request, record responses as structured fields with the source attached, and show which are outstanding. If the company uses business credit reports, the workflow can attach the report the analyst pulled, but it should not pull reports on its own without a defined trigger and authorization.

When applicants provide financial statements, a model can help extract revenue, net income, current assets and current liabilities, and compute the ratios the credit policy uses. Every figure should link to the page and line it came from, and the computation should be deterministic code, not a model's arithmetic.

Statements vary in format, and some are prepared on different accounting bases or periods. The extraction should record the period and basis it found and flag anything inconsistent, such as a balance sheet date that does not match the income statement period.

The analyst sees a single review package: application, completeness status, references, extracted figures with sources, and the relevant credit policy thresholds. The analyst decides whether to approve, approve with different terms, request more information or decline, and records the reasons.

I would not have a model recommend a decision or a limit. The factors a model might weigh are not visible, and a credit decision needs reasons a person can state and defend. The workflow should also avoid presenting information the credit policy does not use, so it does not quietly enter the decision.

Notices of action taken should come from templates counsel has approved, filled with the analyst's recorded decision and reasons where required. The analyst or a designated person reviews and sends. The workflow records what was sent, when and how.

Date tracking matters. The workflow should show applications approaching the company's internal notification target, so nothing waits unnoticed in a queue.

Credit applications contain financial information, bank details and sometimes personal information about owners or guarantors. Keep the workflow inside the finance team's approved systems, restrict access to people involved in credit decisions, and set retention according to the company's record-keeping requirements. Confirm a model service's data terms before sending any applicant documents to it.

In a pilot, compare the workflow's completeness findings and extracted figures with what analysts found by hand. Track missed fields, extraction errors and time from complete application to decision.

The acceptance condition I would agree: every extracted figure links to its source, every application's completion date, decision, decision maker and notice are recorded, and no notice is sent without a person's review.

Bring your credit application, credit policy summary and a redacted sample file.