We recommend that clients obtain a pre-approval of their request either through Southland or the lending partner. This will insure all eligibility/financial issues are addressed before the project costs have been finalized. This will also give the client a clearer picture of what the target purchase price would need to be in order to qualify.
Once the project has been prequalified and the costs have been determined it’s time to obtain the necessary approvals to insure a prompt close. Approval consists of four primary components: first is the formal approval of the loan request from both the SBA and the lending partner, second is approval of the appraisal by both the SBA and lending partner if the project involves real estate or used equipment, third is approval of the environmental investigation if necessary, and finally approval is for any changes or restructuring that was done prior to the close.
After all of the necessary approvals have been obtained and the paperwork has been drawn it’s time to fund the requested loan. Funding initially takes place when the Bank closes the permanent first and the bridge second. Typically the SBA’s portion funds 30-45 days after the initial Bank funding on straight purchases. Project involving construction need to be fully disbursed prior to the SBA being able to replace the bridge with the permanent second. Concurrent signings are possible with advanced notice.