Current SBA time to close?

July 25, 2024

by a searcher from Widener University in Jefferson Township, PA, USA

Interested in hearing what the current timeline is looking for an SBA loan from LOI to close. It feels like 90 days plus is the standard at the current moment. thanks!

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Reply by a searcher
in New York, NY, USA

It depends how much work you've done with your banks before signing the LOI (I strongly recommend you have them give you a quick vet of your deal prior to signing the LOI!), but to get it done in less than 75 days will require a lot of work from you on the front-end. Some banks will tell you that they can do it in###-###-#### days, but unless you have absolutely everything ironed out prior to starting the process (which very few do) you're looking at 90 days. Remember, for a few weeks after signing the LOI you likely won't even have all of the financial information you need to APPLY for the loan, much less have it processed, go to credit, get the commitment letter, go through approvals and closing, and finally fund.

So how do you get that time lower? Easy! Talk to bankers prior to signing the LOI so you can get the paperwork and necessary documents together prior to signing the LOI. If you already have a term sheet at the time of LOI, you've just cut 1-2 weeks out of your timeline. It also makes your bid to a seller look more real -- and you've likely been encouraged to think about the deal from a different lens by a banker who has seen dozens similar to it.

Reply by a lender
in United States

I've worked for several direct SBA loan shops over my career. Even as an insider, ^redacted‌, I couldn't guarantee a closing timeline. Anything can happen: people quit, go on vacation, or departments run short-handed. This can affect not only your lender but also all third-party providers involved. Third-party providers can stall the SBA loan closing process just as much. Never take any lender's turn time to close as a promise. Delays aren't always the lender's fault. The best approach is to drive your SBA bus, ensuring everyone on board communicates openly. It takes a lot of grit and grace, but transactions can close in###-###-#### days if everyone is organized, present, and participating with open communication. i.e., if a strategic deal player is going on vacation, as in the SELLER, tell everyone! Sometimes, a larger loan in the lender's queue will take precedence over smaller loans. Corporate politics play a big role in turn times, both good and bad.

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