Funding Information

SBA Loan

The SBA loan timeline is about 60 to 90 days from initial application to release of funds. The exact timeline depends on the size of the loan, the length of the term, the purpose of the loan, and the experience of the lender. Gathering documentation is the most time-intensive part of the SBA loan process.

Here’s an overview of the SBA loan process and how long each stage takes:

  • Borrower gathers documentation, and applies for loan (one to 30 days)
  • Lender underwrites the loan (10 to 14 days)
  • Lender approves the loan, and sends a commitment letter (10 to 21 days)
  • Lender closes on the loan (seven to 14 days)
  • What documents are expected from you?

Lenders want proof that you and your business are a good risk to take and want to see proof of the 5 C’s:

  • Capital (down payment)
  • Credit (solid score and history)
  • Capacity (ability to pay off the loan)
  • Collateral (property to guarantee the loan
  • Character (past business experience)

Documents needed for a business loan application

The SBA has a detailed list of documents required to complete the loan application process, and each individual lender/bank may have their own requirements as well. From a high level, here are the documents you must include for your loan to be approved:

Underwriting

The next stage of the SBA loan process is underwriting. This is what you might find most daunting because the lender will critique every part of your personal financial history and business. The best advice is to be as open as possible with your lender. Answering questions quickly and accurately will help speed up this part of the SBA loan process.

Here are some of the things that the lender will examine during underwriting:

  • Your personal and business credit history (the bank will do a hard credit pull)
  • Your other personal and business debts
  • Verifying the value of collateral
  • Other lenders you’ve worked with
  • Your business’s revenue history and projections
  • Any tax or legal issues your business has dealt with

Ultimately, underwriting can take a week or two. The lender wants to make sure that you’ll able to pay off the loan on time and in full. Even though the SBA guarantees a portion of the loan, enforcing the guarantee would be a last resort. The lender still needs to meet strict underwriting standards.

Closing Your Business Loan

Once you are approved for funding, you will receive a second checklist from your lender which outlines all of the items you’ll need in order for the loan to fund (the loan closing process). Since this part of the loan process often involves working with third parties such as construction companies and government offices, timing is somewhat out of your control. Documents required during loan closing include:

Construction Documentation:  If your loan will be used for construction, whether a new build out or making improvements to an existing space, you will be required to supply the following:

  • Fixed price contract from contactor
  • Contractor W-9
  • Builders risk insurance and contractor’s general liability insurance
  • Building permits
  • SBA Form 601(Agreement of Compliance)
  • Executed business lease and/or contract for location: If your business will have a physical location, you’ll need to provide either an executed lease or a completed contract to show your funding can cover the estimated cost of your building or build out.

Proof of equity: This may include bank statements and invoices as evidence of your ability to make the down payment on the loan.

Entity documents:

  • Articles or Certification of Incorporation
  • Bylaws
  • SS-4 Form to confirm Federal Tax ID Number (EIN)
  • DBA filing or Certificate of Assumed Name
  • Business License/Permits (as required by your state)
  • Business insurance: Depending on your business, this may include a business owner’s policy, general liability insurance or professional liability insurance (also known as errors and omissions), or flood insurance if your business is located in a flood zone.

Life insurance: The bank funding your loan may require you, as the business owner and person responsible for the loan, to carry life insurance and provide proof.

Executed franchise agreement: If applicable, as a franchise owner, your agreement must be complete before receiving funding.

Recommended Vendors for Funding

FIRST FINANCIAL

First Financial provides flexible and creative financing for its customers. With nearly 25 years of experience, and millions of dollars worth of loans funded for our valued clients, their team of highly trained professionals can structure both conventional, and highly sophisticated transactions to meet your business demands.

They offer a full array of lending products to meet all your funding needs. Experience the First Financial difference, get started today.

APPLE PIE

There are many financing options for your franchise, but making the right choice is critical to your success. ApplePie understands the complexity and time constraints that you face in securing capital. That’s why they’ve created a transformative lending network to suit your financial needs, maximizing flexibility and reducing the headaches and inefficiency of working separately across individual lenders.  

FRANFUND

Franfund is an exceptional vendor that has worked with us in the past. They know the brand and they are looking forward to helping you succeed!