Underwriting

Underwriting is like when you ask a grown-up for permission to do something, and they say yes or no depending on whether they think it's safe or not. Except with underwriting, it's when a grown-up (like a bank or an insurance company) checks if a person or a company is safe to lend money to or insure.

They look at things like how much money the person or company makes, if they have any debts or loans they still need to pay back, and if they have a good track record of paying back what they owe.

If the underwriters (the grown-ups doing the checking) think it's safe to give the person or company money, they'll say yes and decide how much money they can borrow or if they can get insured. If they think it's not safe, they'll say no and not give them any money or insurance.

So basically, underwriting is like a grown-up deciding if it's safe to give someone or a company money or insurance based on how responsible they are with money.