SBA Loan Pre-Approval for Acquisition Financing

searcher profile

June 23, 2020

by a searcher from Princeton University in Annandale, Clinton Township, NJ, USA

Can you get pre-approved for an SBA 7(a) loan prior to getting a deal under LOI?

I'm trying to avoid the chicken and the egg scenario where sellers want certainty of financing prior to signing and LOI, and bank lenders want an LOI before giving feedback on financing.

2
16
512
Replies
16
commentor profile
Reply by an intermediary
from Creighton University in Los Angeles, CA, USA
As a buyer, you can get an idea of whether you qualify for a loan and for how much by talking to a lender. If you have good credit, relevant work experience, and 20% of the purchase price in cash for a down payment, you're likely to qualify. Banks will review vetted deals before you submit an LOI if you have some initial documents.

For context, I co-founded Dealwise to be the easiest and fastest way to get an SBA loan for a business acquisition. In a nutshell, we connect borrowers and SBA 7(a) lenders, functioning as an automated loan broker. You can check us out here: [https://godealwise.com/beacon]
commentor profile
Reply by an intermediary
from Boise State University in 800 W Main St, Boise, ID 83702, USA
As a buyer, a lender can give you an indication of whether you would qualify and for how much. In other words, if you have good credit, a relevant work history and experience, have 20% of the estimated purchase price in cash for a down payment, then its likely you will qualify. Also, if the seller is represented by a professional and knowledgeable business broker, many of us get the deal pre-qualified by at least one SBA lender before taking the business to market. Also, we assist the buyer in accessing those SBA lenders that are ready, willing, and able to do business acquisition loans. Not all lenders are the same.
commentor profile
+14 more replies.
Join the discussion