Have you been asked to send broker SBA information?
May 02, 2024
by a searcher from Emory University - Goizueta Business School in Middlesex, NJ 08846, USA
We have a broker asking for SBA Personal Financial Statements, SBA Pre-Commitment Letter, and a SBA Lender Term Sheet. I've heard of sending a term sheet pre-LOI to show a potential seller that you're serious, but not the others. Is it typical for a broker to request this information?
from The University of Chicago in Chicago, IL, USA
Banks issue Term Sheet after the LOI is signed. Hopefully the broker and seller have done enough DD of the buyer before signing the LOI.
In my personal practice, of 35 years I have asked for PFS <1% of time and that too if seller asks and likes the buyer. I have other ways to test buyer's ability to pull off a deal. Not everyone gets the CIM. If a buyer has an "attitude" it helps reduce the CRM size.
Having said above, there is a learning curve for both broker and the searcher. Hence both need to respect ech other. Supposedly, searcher (most, not all) has more maturity
from George Mason University in Manassas, VA, USA
i usually just sent my lenders preapproval letter.
i learned really quick that the harder it is to get the CIM the more likely there’s something to hide there.
one broker completely wrote me off during a call. It was for a business selling for less than the business im current approved for. Oh well, his loss not mine.