The most common question clients ask me about large SBA loans and business purchase financing is how fast I can get an initial decision of loan approval and how fast funding will take to get a large SBA loan completed. The honest answer is for an approval letter the timing is approximately two to three days once all required documents are summitted and loan processing and closing average anywhere from forty days to four months.
The most critical factor is getting professionally pre-approved (for buyers) before searching and submitting a deal and for owners/business brokers/agents it’s critical to pre-flight your deal and and situation before going to market. This will save you a lot of time and headaches during the SBA large loan process!
While there are many steps the loan application and select documents must pass through from start to finish my answer is always “it’s all up to you” when asked about the approval and processing timing process. This statement often catches buyers, sellers, business brokers and advisors off guard but it is the absolute truth.
There are approximately thirty factors (half from the buyer, half from the seller) that affect the SBA large loan decision making process & loan processing & closing timing – factors also include: type of business being financed, the size of the loan, special licenses involved in the operations of the business, if real estate is being considered for purchase with the business, how many 3rd party advisors are giving their “input”, etc.
Key Documents & Info For Buyer Pre-Qualifications Usually Include:
- Getting An Accurate Personal Financial Statement (PFS) Completed
- Getting Three Years Of Personal Tax Returns Reviewed And Ready For Access On Deals
- Current Buyer Profile & Work History / Resume Completed Key Documents & Info For Seller Pre-Flights / Pre-Qualifications Usually Include:
- Last Two To Three Years Of Complete Business Tax Returns
- Copy Of The Lease (If The Business Isn’t Being Sold With Real Estate Included)
- Last Two To Three Years Of Complete Business Financials – P&L’s, Balance Sheet, AR’s, AP’s, etc
- Current Interim Financials – (At Lease The P&L’s ….)
- A Write Up About The Business, Executive Profile etc.
- A Franchise Agreement (If The Business Being Sold Is A Franchise Resale)
