Pre-funding expenses

by a searcher from Universidad Panamericana

2 years ago

There are some small expenses that may be done by the searcher directly before receiving any funding. Do you think those expenses be reimbursed after funding or should be considered as sunk costs? I don't want to pass as cheap, I just want to know how this is handled in the industry,

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2 comments

lender from Eastern Illinois University

Depending on what type of lending you are doing you can sometimes get credit for upfront costs. If you do an SBA loan for an example, buyer costs can get included in the funding and you can get it covered. You end up having to come up with less money down or if you have costs deferred to closing they can get paid directly at closing. However, if you use more conventional financing, it is unlikely those costs will get covered. There is a limit to what can get covered though. Usually they are not going to cover everything and things like travel and other abstract expenses will not be covered. But CPA due diligence, legal expenses, etc. can usually be rolled in. If you have additional questions you can reach me directly at --@----.com

2 years ago | like reply | 0 likes

searcher from Linfield College

Which expenses in particular? In a self-funded scenario, a searcher can get partially reimbursed for legal and QOE costs incurred up front after closing for example.

2 years ago | like reply | 0 likes

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