Bank specific SBA requirements: What's normal vs "odd"?

March 12, 2026

by a searcher from Middle Tennessee State University - Jennings A. Jones College of Business in Oakland, CA, USA

Hi searchers, I'm working through the final steps to close a deal with an SBA lender. Throughout, the lender has requested several items that my team has found "odd". So, I wanted to check here if anyone else has seen these types of requests. Note that my team is very experienced in M&A, with each individual averaging +30yrs of closing deals. A few example requests are below: Title Commitment - The bank is requesting to work directly with my real estate counsel on title commitment requirements. My counsel said this was "unusual" and that the bank will normally use their own preferred vendors and provide their specific endorsements. Closing Agent - The bank suggested that my M&A attorney will need to be the transaction's closing agent and be responsible for distributing funds at close. My M&A attorney pushed back hard on this, stating one issue is that he's not usually legally allowed to "touch the money". Insurance - The bank is requiring that they be listed as an "Additional Insured" on the acquired company's general liability insurance policy. My insurance broker said this was "odd" and questioned what the bank's interest in the liability would be. Are the bank's requests normal for an SBA deal? Or is my team flagging a potentially large issue with this bank?

Reply by a lender
from University of Central Florida in St. Petersburg, FL, USA

They’ve already approved you, so you’ve made it through the hard part. Closing is never simple and every bank has its own process, but none of this reads as a “red flag.” Regarding Title, the bank likely has its own requirements. They may simply be recommending that you work with your counsel to streamline the number of individuals involved and reduce your costs. For the closing agent, you’ll need someone to prepare the buy/sell documents (resolutions, bill of sale, etc.). It’s not uncommon for buyer or seller counsel to handle this. You can use a third party, and in some cases especially when purchasing CRE the escrow agent/title company can take on that role. Requesting Additional Insured status is very common today. It’s just an added precaution that most institutions now require.

Reply by a lender
from Youngstown State University in Pinehurst, NC, USA

It is important to remember that each bank that offers SBA loans has their own parameters with which they work. The SBA rules and regs need to be followed but each bank has their own process that they follow. We have affiliations with a variety of SBA lenders. We place our loan packages with lenders that we feel are the best fit for our clients and their particular industry.

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