Unless a potential buyer has overwhelming financial strength, an SBA loan guarantee will be needed to secure long-term financing. To prevent losing momentum in the sales process and having the potential transaction blow up with a failed attempt, being successful with the first loan application with the bank is critical. Using a time-proven SBA loan broker is the best way to ensure the likelihood of success. The following are a few of the reasons why.
1. The loan broker has more than one bank to choose from, based on the details of the potential transaction. Transactions are typically reviewed by the potential lender before making application to establish if it is a fit, and to avoid wasting time.
2. If, for some reason, the loan package does not meet the criteria of one lender, it can be quickly submitted to a bank that has expressed interest in learning more.
3. Many times, a loan not being of interest to one bank has nothing to do with the details of the transaction; it has everything to do with bank policy and criteria.
4. It is not uncommon for a bank, unlike a loan broker, to string the process out for 60 days only to say it can’t fund the loan after all. This causes both the buyer and seller to become frustrated and, in many cases, to part ways.
5. An SBA loan broker doesn’t get paid unless and until the loan is successfully placed and the loan is funded. As a result, the loan broker is highly motivated to make sure all aspects of the transaction will meet the bank’s criteria. If there are issues, these are openly and candidly discussed to avoid wasting anyone’s time.
6. By using a seasoned loan broker, when issues arise in the underwriting process (and there will be issues), you have access to experience with potential work-around alternatives.
7. A loan broker can keep the transaction alive. For example, I had a loan that had been approved and was moving toward funding during the financial meltdown, when the lender suddenly decided to pull out of SBA lending. The loan broker was able to quickly flip the loan to another bank and got the loan funded. If the buyer had been dealing directly with the bank, the transaction would have not moved forward.
8. By using a seasoned loan broker, you can be reasonably assured the loan will be funded once accepted. The loan broker I have used for more than 20 years typically runs the transaction past a few bankers first, to get feedback and a reading on the feasibility of funding, before moving forward. This saves everyone time and frustration.
9. If you would like a confidential conversation on how to prepare your business to be sold, receive the best price possible and increase your likelihood of getting the transaction funded so you get all cash at closing, please call me at 888-893-6661, e-mail bobd@dolansales.com. This is my LinkedIn profile: http://www.linkedin.com/in/dolansales. I am not compensated in any way by the loan broker. My mission is to get the transaction funded, and at the best terms available for the buyer.
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