Closing before SBA funding

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by a searcher
in Illinois, USA

2yrs ago

Closing before SBA funding

Hello all,

Can you close and change the ownership of business before funding happens ? Bank is going to take another 3 weeks before they can fund it. But Seller wants to close on first of month to keep the books clean.

What things needs to be true in order to Close / change the ownership of prior to bank funding.

this is an asset purchase .

thanks in advance.

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reply by an intermediary 2yrs ago
from The University of Chicago in Chicago, IL, USA

Closing before funding is risky. If both sides try to protect themselves if deal does not close, then the legal docs cost will be high depending on the lawyers.
There are other ways to keep closing clean. happy to discuss. DM me.

reply by a searcher 2yrs ago
from Southwestern University in Houston, TX, USA

The SBA isn't really big on "last minute changes". Or "changes". If you're going to close prior to bank funding, you'll need the owner to accept delayed payment. And you need to accept the risk that the bank will change their mind - a "feature" of 2023.

If the seller wants to close on the 1st of the month and it's going to take 3 weeks for the bank, close the 1st of the following month. There's probably more going on here than meets the eye.