- Most SBA acquisition loans close in 90-120 days from signed LOI—plan for 120 days in your purchase agreement with an option to extend.
- Start financing during week 2-3 of due diligence, not after—running both tracks simultaneously saves 3-4 weeks.
- Third-party reports (valuation, appraisal, environmental) are often the critical path—order them early and respond to requests same-day.
- Work with PLP (Preferred Lender Program) lenders when possible—they have delegated SBA authority and cut 1-2 weeks from the process.
- Timeline overview
- Phase 1: Due diligence (30-60 days)
- Phase 2: Loan packaging (1-2 weeks)
- Phase 3: Lender selection (2-3 weeks)
- Phase 4: Underwriting (3-6 weeks)
- Phase 5: SBA authorization (1-2 weeks)
- Phase 6: Closing (1-2 weeks)
- How to accelerate the timeline
- Common delays and how to avoid them
- Frequently asked questions
One of the most common questions we hear from business buyers: “How long does this actually take?” The answer depends on deal complexity, lender efficiency, and how prepared you are.
This guide breaks down the complete timeline from signed Letter of Intent to closed SBA loan, with realistic timeframes and tips for avoiding delays.
Timeline Overview
| Phase | Duration | Cumulative |
|---|---|---|
| Due Diligence | 30-60 days | Day 30-60 |
| Loan Packaging | 1-2 weeks | Day 45-75 |
| Lender Selection | 2-3 weeks | Day 60-95 |
| Underwriting | 3-6 weeks | Day 80-135 |
| SBA Authorization | 1-2 weeks | Day 90-150 |
| Closing | 1-2 weeks | Day 100-165 |
| Total | 90-165 days |
Realistic expectation: Most SBA acquisition loans close in 90-120 days from signed LOI. Plan for 120 days in your purchase agreement with the option to extend.
Phase 1: Due Diligence (30-60 days)
What Happens
After signing the LOI, you investigate everything about the business:
- Financial review: Tax returns, P&L, balance sheet, AR/AP aging
- Legal review: Contracts, leases, litigation, compliance
- Operational review: Employees, customers, vendors, systems
- Market review: Competition, industry trends, growth potential
Documents to Collect
- 3 years business tax returns
- 3 years personal tax returns (seller)
- Monthly P&L statements (trailing 24 months)
- Balance sheet (current)
- AR/AP aging reports
- Customer and revenue breakdown
- Employee roster with compensation
- Lease agreement(s)
- Key contracts
- Equipment list with values
Don’t wait until due diligence is complete to start financing. Begin loan packaging during week 2-3 of due diligence. Running both tracks simultaneously saves 3-4 weeks.
Phase 2: Loan Packaging (1-2 weeks)
What Happens
You (or your broker) assemble the complete SBA loan application package:
- SBA Form 1919 (Borrower Information Form)
- Personal Financial Statement (SBA Form 413)
- Personal tax returns (3 years)
- Business tax returns (3 years)
- Business financial statements
- Purchase agreement or LOI
- Business plan or acquisition narrative
- Resume highlighting relevant experience
- Debt schedule
- Projections (if required)
Quality Matters
A well-packaged application moves faster. Common packaging mistakes that cause delays:
- Missing signatures on forms
- Incomplete personal financial statements
- Tax returns without all schedules
- No explanation for credit issues
- Unclear source of equity injection
Phase 3: Lender Selection (2-3 weeks)
What Happens
Your application goes to lenders for initial review and term sheet issuance.
Single Lender vs. Multi-Lender Approach
| Approach | Pros | Cons |
|---|---|---|
| Single lender (direct) | Simpler, existing relationship | No rate competition, higher decline risk |
| Multi-lender (broker) | Competition drives better terms, higher approval odds | Slightly more coordination |
At GoSBA Loans, we submit to 5-10 lenders simultaneously. You typically receive 2-5 term sheets within 2-3 weeks.
What’s in a Term Sheet
- Loan amount
- Interest rate (or rate range)
- Term length
- Collateral requirements
- Personal guarantee requirements
- Key conditions for approval
- Estimated fees
Beyond rate, consider: SBA experience—how many similar deals have they closed? Speed reputation—what’s their average close time? Communication—how responsive are they? Flexibility—how do they handle issues that arise?
Phase 4: Underwriting (3-6 weeks)
What Happens
The selected lender conducts full due diligence on you and the business:
- Credit analysis
- Cash flow analysis and DSCR calculation
- Collateral evaluation
- Business valuation (third-party ordered)
- Real estate appraisal (if applicable)
- Environmental review (if real estate)
- Background and character verification
Third-Party Reports
These take time and are often on the critical path:
| Report | Typical Turnaround |
|---|---|
| Business valuation | 2-4 weeks |
| Real estate appraisal | 2-3 weeks |
| Phase I environmental | 2-3 weeks |
| Phase II environmental (if needed) | 4-8 weeks |
Common Underwriting Requests
Expect lenders to ask for:
- Explanation of any credit issues
- Clarification on financial statement items
- Additional documentation for add-backs
- Updated financials (if close to year-end)
- Verification of equity source
At the end of underwriting, the lender issues a Commitment Letter—a conditional approval that outlines final terms and conditions to close.
Phase 5: SBA Authorization (1-2 weeks)
What Happens
For most loans, the lender submits the file to the SBA for final authorization. The SBA reviews and issues an Authorization Letter.
PLP vs. Standard Processing
| Authority | Description | Timeline |
|---|---|---|
| PLP (Preferred Lender) | Lender has delegated authority | 3-5 business days |
| Standard | SBA reviews full file | 10-15 business days |
Work with PLP lenders when possible—they’re faster and have more experience. PLP status means the SBA trusts them to make final credit decisions, cutting 1-2 weeks from your timeline.
Phase 6: Closing (1-2 weeks)
What Happens
Final steps to fund the loan and complete the acquisition:
- Document preparation: Loan documents, security agreements, guarantees
- Title/lien searches: Verify clear collateral position
- Insurance requirements: Property, liability, life (if required)
- Final conditions: Clear any remaining lender conditions
- Closing meeting: Sign documents, fund escrow
- Funding: Loan proceeds released to complete purchase
Insurance Requirements
Common insurance requirements for SBA loans:
- Property insurance (if assets or real estate)
- General liability insurance
- Business interruption insurance
- Key person life insurance (sometimes required)
How to Accelerate the Timeline
1. Start Financing Immediately
Begin loan packaging within 2 weeks of signed LOI. Don’t wait for due diligence to complete.
2. Be Prepared with Documents
Have all personal documents ready before you even sign an LOI:
- Tax returns (3 years)
- Personal financial statement
- Resume
- Proof of equity source
3. Use a Broker with Lender Relationships
Brokers get faster attention because lenders want their deal flow. Applications from established brokers often move to the front of the queue.
4. Respond to Lender Requests Same Day
Every day you delay responding is a day added to your timeline. Treat lender requests as urgent.
5. Choose a PLP Lender
Preferred Lenders have delegated SBA authority, cutting 1-2 weeks from the process.
6. Get Seller Cooperation
Delays often come from slow seller responses. Set expectations early that the lender will need additional documentation.
Common Delays and How to Avoid Them
The #1 cause of delays. Use a checklist and have your broker review completeness before submission. A well-prepared application with all documents upfront can save 2-4 weeks.
Delay: Valuation Takes Too Long
How to avoid: Provide all financial documents immediately when lender orders valuation. Respond to valuation analyst questions within 24 hours.
Delay: Landlord Won’t Cooperate
How to avoid: Engage landlord early (during due diligence). Get lease assignment approval as a condition in your purchase agreement.
Delay: Seller Gets Cold Feet
How to avoid: Keep seller informed of progress. Maintain relationship throughout process. Earnest money deposit demonstrates commitment.
Delay: Environmental Issues
How to avoid: Identify potential issues early. If real estate is in a historically industrial area, budget time for Phase I/II reports.
Delay: Franchise Approval
How to avoid: Start franchise approval process simultaneously with SBA process. Some franchises take 30-60 days to approve transfers.
Most SBA acquisition loans close in 90-120 days from signed LOI. The keys to hitting the shorter end of that range: start financing early (during due diligence, not after), have documents ready before you need them, respond to lender requests same-day, work with experienced PLP lenders, and keep sellers engaged throughout the process. Plan for 120 days in your purchase agreement, but with proper preparation, you can often close faster.
Frequently Asked Questions
Most SBA acquisition loans close in 90-120 days from signed LOI. Some close in 60-75 days with ideal conditions; complex deals can take 150+ days.
Not necessarily. Bank relationships don’t guarantee faster processing, and you lose rate competition. Experienced SBA lenders (regardless of relationship) close fastest.
Missing or incomplete documentation. A well-prepared application with all documents upfront can save 2-4 weeks.
Yes. Ask for 120 days with an option to extend 30 days if needed. Sellers expect SBA timelines to be longer than conventional financing.
Request an extension. Communicate proactively with the seller about where you are in the process. Most sellers prefer to extend rather than restart with a new buyer.
