SBA Lending question

July 09, 2021

by a searcher from Providence College in Providence, RI, USA

For SBA lenders that look for 10% of the total amount, do they require to see Buyer's financial statement to reflect the 10% before approving? And if yes, what if the buyer's bank statement is coming from an International bank (overseas), is that acceptable?

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Reply by a searcher
from Stevens Institute of Technology in New Jersey, USA

Joseph, in addition to what Heather mentioned, SBA Bank will require to see the source of the funds.(this is in required as per anti-money laundering law). Thus, whoever is the 10% equity investor has to provide the bank statements showing the funds in the account for about 60 days. If the funds were transferred in less than 60 days, the account statements of the source accounts (it could be any other person's funds) will need to be provided. In addition, an affidavit (notarized) of funds transfer will be required as well. If someone is gifting the equity, a gift letter needs to be accompanied along with all the above.

Hope this helps, -RJ

Reply by a lender
in Yorba Linda, CA, USA

Joseph, an SBA lender will ultimately need to see 2 months of bank statements for each shareholder contributing equity. Since the cap stack is not typically finalized until close to the end, these bank statements are not typically required until just before closing. But, the funds do need to be in US bank accounts for at least 60 days prior to closing.

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