Laurel Walk | Jul. 10, 2018

Eight Common Delays of SBA Loan Approvals

Rules. Regulations. Documents. Financials. Often times these words can be intimidating to small business owners. However, the process of getting a Small Business Administration (SBA) loan doesn’t have to be scary! Understanding what you need up front allows for a swift approval process that will save both you and your borrower the potential headache of being declined.                                             

In order to keep the SBA approval process on track, we’ve outlined the most common delays that can be avoided. Here’s a list of eight situations that we see most often…

  1. Minimal communication from lender or borrower – Maintaining close communication with us ensures that we can obtain all the required documents for SBA approval.
  2. Unclear information provided at the onset of the application – It’s important that our loan production team has clear information regarding ownership, project uses, debt refinance and affiliates. If any of this information is inaccurate or not fully identified, then we will run into roadblocks, which delay the project timeline.
  3. Constantly changing project amount, ownership structure, business location, etc. – Making project updates slows down the approval process. We advise sending the most complete package so we can avoid making too many changes, allowing for a quicker turnaround time.
  4. Lacking a fully developed business concept and financial projections for startup or expansion projects – This goes back to point #3. By providing a complete loan package up front, we can ensure project submission in a timely manner.
  5. Inaccurate disclosure of application questions – This includes details such as credit issues (like tax liens or bankruptcies) or agreements the borrower may have with a third party. From the outset, it’s important that this information is disclosed on the application if possible.
  6. Collateral doesn’t appraise for estimated amount – Once again this is something that may be out of anyone’s control. But try to be as thorough, accurate and realistic as possible!
  7. Occasional delay in receiving or verifying tax transcripts  – Unfortunately, this one is out of our hands and will be identified by the IRS. However, returning the 4506-T form early in the process may help us avoid potential delays.
  8. Lease, construction bids, and pulling permits – Colorado is a booming state, and project timelines may be difficult to predict. Patience is key. Make sure that you are mentally prepared for unforeseen setbacks when it comes to building or renovations.

Should you have any questions about how you can avoid delays with a project, please don’t hesitate to reach out! We treat all projects equally; regardless of whether the loan amount is big or small, we will give you our undivided attention to ensure that you are supported every step of the way.