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SBA 7(a) Loan Timeline
What to Expect When Buying a Funeral Home
The process of purchasing a funeral home with an SBA 7(a) loan can be complex and varies by transaction. However, this timeline provides a clear outline of the major steps involved, what happens at each stage, and typical timeframes. While each transaction is unique, this guide will help you understand the general flow of the process and how long things usually take.
1) Initial Review & Deal Structuring
Goal: Confirm the deal’s cash flow and determine the best structure for the transaction.
At this stage, we:
- Review the buyer’s background (industry, management, and ownership experience).
- Discuss the target business (price, cash flow, location, real estate vs. business-only).
- Assess high-level financial strength (credit, liquidity, net worth, down payment).
- Confirm the deal appears SBA-eligible and cash-flow supportable.
- Set expectations on structure, pricing range, and timeline.
Typical Timing:
This stage can take as little as a few days, but may take longer if information is incomplete or if negotiations are ongoing.
2) Letter of Intent (LOI)
Goal: Align both parties on major deal terms and move forward.
At this stage, we:
Once the basic terms are agreed upon, the buyer and seller sign a Letter of Intent (LOI). This document outlines the key terms of the deal, including price, financing structure, and other critical details.
Typical Timing:
This step depends on the pace of negotiations between the buyer and seller, and can vary.
3) Build the Loan File & Submit for Credit Approval
Goal: Assemble and submit a complete loan package for underwriting approval.
At this stage, we:
- Collect borrower financial information (personal and business).
- Gather business financials and tax returns (3 years).
- Submit deal structure and purchase terms.
- Compile supporting documents.
Typical Timing:
Approval typically takes 2–3 weeks, depending on underwriting volume and credit committee availability.
4) Credit Approval, Commitment Letter & Deposit
Goal: Lock in approval and begin the closing process.
At this stage, we:
- If the loan is approved, the bank issues a commitment letter outlining the loan terms.
- The buyer signs the commitment letter, and a deposit is collected to cover required third-party reports (appraisal, valuation, environmental reports).
Typical Timing:
Usually takes a few days after credit approval.
5) Closing Phase Begins: Third-Party Reports & Purchase Agreement
Goal: Complete required third-party reports and finalize legal documents.
At this stage, we:
- Order appraisal (if real estate is involved).
- Complete business valuation (if required).
- Conduct environmental report (if real estate is involved).
- Finalize purchase agreement and coordinate legal reviews.
- Conduct title work and lien searches to ensure clear ownership transfer.
Typical Timing:
This phase typically takes 4–8 weeks, depending on the report turnaround times and legal negotiations.
6) Final Review & SBA Authorization
Goal: Confirm everything aligns with the approved loan terms and obtain SBA authorization.
At this stage, we:
- Review all documents, including the final purchase agreement and third-party reports.
- Submit the documents to the SBA for loan authorization.
Typical Timing:
SBA Authorization typically takes less than 48 hours once submitted.
7) Schedule Closing & Prepare Closing Statement
Goal: Coordinate all parties and finalize the closing details.
At this stage, we:
- Schedule the closing and prepare the closing statement.
- Coordinate with the bank, title company, and buyer/seller attorneys.
Typical Timing:
This usually takes a few days to finalize after SBA Authorization.
8) Closing & Funding
Goal: Complete the transaction and fund the loan.
At this stage, we:
- Sign all loan and legal documents.
- Verify and document the buyer’s equity injection.
- Pay the seller according to the purchase agreement.
- Finalize any seller notes or standby arrangements.
- Transfer ownership, and disburse loan proceeds to complete the transaction.
Typical Timing:
The closing itself is completed in one day (the closing date).
Overall Timeline
In most cases, the full process takes about 60–90 days from LOI to closing. However, there are several factors that can cause delays, including:
- Delays in finalizing the purchase agreement.
- Liens that need to be cleared.
- Extended turnaround times for third-party reports.
- Missing or incomplete information.
Many steps happen in parallel, but the overall timeline heavily depends on how quickly the buyer, seller, and their advisors can work together.
SBA 7(a) Funeral Home Loan Timeline Questions
Answers based on the questions buyers are actively searching before starting the loan process.
Most SBA 7(a) loans close in 60 to 90 days from a signed letter of intent, though the timeline varies with how quickly third-party reports and purchase agreement details come together. Business-only transactions without real estate tend to close faster than deals that include a property purchase.
The process runs through eight stages:
- Initial review
- Letter of intent
- Credit approval (2–3 weeks)
- Commitment letter and deposit
- Third-party reports (4–8 weeks)
- SBA authorization (under 48 hours)
- Closing scheduling
- Funding
Most delays happen during the third-party reports phase, not underwriting itself.
Typically less than 48 hours. This is usually the fastest stage in the entire process, since it happens only after the bank has already completed its own underwriting and cleared major conditions.
The most common causes are delays finalizing the purchase agreement, liens that need to be cleared before closing, extended turnaround on appraisals or environmental reports, and missing or incomplete borrower documentation.
Preparing your file in advance is the single biggest lever you control.
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