Private credit screening memo: A modern template for 2026

In a competitive deal environment where turnaround times are measured in hours, the initial screening memo serves as the ultimate gatekeeper of an analyst's time. A well-structured one-pager not only summarizes a company, but it builds a defensible narrative for why a deal should — or should not — move into late-stage diligence.

However, the traditional private credit underwriting process is often slowed down by tedious data collection, verification, and organization. By using a vertically integrated AI engine, teams can now populate comprehensive templates that deliver institutional-grade quality at near-instant speed.

Below is the 2026 standard for a private credit screening memo, designed to reduce your time-to-conviction for a new borrower.

I. Company overview

This section establishes the foundational profile of the borrower. It should move from a broad business description to specific operational metrics, such as product suites and customer concentration.

• Business model and history: Clearly define the B2B or B2C nature of the business, its primary product offering, and its operating history. 
• Key products and services: Detail the core platform features, proprietary infrastructure, or unique AI-driven workflows that define the company's value proposition.
• Revenue model: Break down the quality of earnings, specifically noting the percentage of recurring subscription revenue versus volume-based or professional services fees.
• Target customer and geography: Identify the primary market (e.g., mid-market to enterprise retailers) and geographic footprint of operations and engineering.
• Customer concentration: Explicitly state the risk profile of the top customers. Ideal customer diversification typically shows low concentration, with a top 10 cohort representing less than 20-30% of total ARR.

II. Financial overview

The financial section should provide an abbreviated snapshot of the company's past performance and future trajectory.

Consider the following P&L Summary as a baseline for capturing a quick view of the applicant’s financial performance:

Include supplemental analysis, such as:

• Financial commentary: Contextualize the numbers. Highlight consistent top-line momentum, margin compression due to growth investments, or expected expansion as the company achieves operating leverage.
• Key ratios: Include critical investment-specific ratios, such as Net Revenue Retention (NRR), to signal customer satisfaction and sustainability of growth.

III. Investment merits

List 3-5 high-conviction reasons to pursue the transaction. These should be data-backed observations that align with your firm's investment thesis.

• Business durability: Mention proven growth models through multiple economic cycles.
• Revenue visibility: Emphasize long-term contracts (12–36 months) with auto-renewal clauses that create embedded stability.
• Market position: Note the domain expertise that enables the borrower to compete effectively against larger, incumbent platforms.

IV. Investment risks and mitigants

A candid assessment of downside risk is as important in a professional screening memo as the upside case. A great screening memo pairs every identified risk with a corresponding, defensible mitigant.

Your screening memo might highlight, for example:

• Competitive pressure: Threats from well-capitalized market leaders.
  • Potential mitigant: Highlight whether there are high switching costs or a specialized vertical focus that horizontal competitors lack.
• Margin volatility: Recent margin declines driven by product mix shifts.
  • Potential mitigant: Explain management's roadmap for gross margin recovery as the company scales.
• Sector cyclicality: Macro sensitivity in the borrower's core vertical.
  • Potential mitigant: Frame the product as an essential business expense rather than discretionary spend.

V. Process/transaction overview

The final section of a screening memo provides the context of the deal itself.

• Borrower reasoning: Briefly explain the founders' or owners' reason for seeking capital (e.g., liquidity, M&A activity, or international expansion).
• Advisor status: Identify the advisor or bank managing the sell-side transaction to determine the level of competitive interest and process formality.

Automating the screening memo with F2’s agentic architecture 

By deploying F2’s agentic architecture, deal teams can eliminate the manual tax of data entry and pivot immediately to high-conviction analysis.

Training the platform on your "house style"

Every institutional lender maintains a specific investment voice and a unique framework for framing risk. F2 ingests your firm’s precedent screening memos to learn your preferred formatting, internal ratio definitions, and narrative tone. This ensures that the generated merits and risks sections align with your firm's specific investment thesis from the very first draft.

Automating the template via agentic orchestration

Manually assembling a screener from a fragmented data room requires significant analyst time. F2 replaces this assembly phase with a coordinated AI workflow that processes information with the technical proficiency of a seasoned associate:

• Ingestion: The platform identifies and triages the entire data room hierarchy instantly — classifying audits, tax returns, and cap tables while simultaneously flagging missing materials required for analysis.
• Extraction: Specialized sub-agents reason over the data to pull customer concentration, P&L metrics, and complex debt schedules. Unlike traditional OCR, these agents understand spreadsheet logic, tracing formula chains across multi-tab Excel workbooks.
• Synthesis: The system drafts the narrative on the merits and risks based on the firm’s historical precedents, leaving the analyst to serve as the final investigative reviewer of the outputs

Institutional traceability via Audit Mode

F2’s latest improvements to Audit Mode have embedded traceability directly into the deal workflow by introducing Databook. At its core, Databook is an Excel-native system that preserves the work behind every number and is built directly from source documents in the data room. Through Audit Mode, every number, paragraph, and ratio in the generated screener is clickable, allowing users to view Databook and see exactly how the output was produced. 

Clicking a metric instantly surfaces the underlying formulas and original source documents inline and in context, ensuring every screening decision is backed by a defensible, transparent audit trail. Because Databook is Excel-native, teams can export clean outputs, extend the analysis, and collaborate without losing visibility into how the numbers were generated.

Speed as a competitive advantage

The ability to move quickly from data ingestion to a defensible yes-or-no is a significant competitive advantage. The traditional screening workflow — hours spent renaming files and re-keying a P&L — is no longer a requirement to produce a rigorous, informed opinion on a borrower.

By adopting an agentic workflow, firms can reclaim up to 75% of their underwriting time, allowing analysts to pivot from administrative tasks to high-leverage investment judgment.

F2 enables deal teams to move beyond manual underwriting processes and make better investment decisions.
Ready to accelerate your screening process?