The SBA Loan Timeline: LOI to Closing, and What a Year-End Close Really Takes

"How long does this take?" is the first question almost every buyer asks, and the honest answer — "it depends" — is useless to someone with a signed letter of intent and a closing date in it. So here is the more useful version: what the phases actually are, which ones you control, which ones you don't, and where the weeks quietly disappear.

The number most people have in their head is somewhere between 30 days and six months, which tells you how little the average is worth. The spread isn't randomness — it's the difference between a deal that arrives organized and one that gets assembled while it's being underwritten. FTI Capital is a broker and advisor; we don't lend the money. We package these deals and take them to the lenders whose appetite fits, and a realistic schedule is part of what we're hired to produce.

The 30-second version

The phases, and what each one is really waiting on

Phase 1 — Before the LOI (open-ended, but do it now)

Nothing about the loan clock starts here, but everything about its length is decided here. Getting pre-qualified, understanding roughly what you can borrow, and knowing what a lender will want to see means the LOI you sign has a closing date built around reality rather than optimism.

Buyers who skip this step routinely negotiate a 45-day close on a deal that cannot physically close in 45 days, then spend the next two months asking the seller for extensions from a position of weakness. The LOI is the cheapest place in the whole process to buy yourself time.

Phase 2 — LOI to submitted package (1 to 3 weeks, and this one is yours)

Once there's a signed LOI, the work is assembling the package: three years of business tax returns and financial statements, current interim statements, the purchase agreement or LOI, your personal financial statement, your resume, a debt schedule, and a use-of-funds breakdown. See what makes a strong SBA loan application for the full picture.

This phase takes one week for an organized buyer with a cooperative seller and six weeks for everyone else. It is the highest-leverage stretch of the entire timeline, because it is the only phase where speed depends almost entirely on you. Every day here is a day you get back at the end.

The usual bottleneck is the seller. A business whose books are on a shoebox-and-QuickBooks system, or an owner who is quietly ambivalent about selling, can add a month before an underwriter has seen anything. Ask for the document list at LOI signing, not after.

Phase 3 — Lender selection and term sheet (1 to 2 weeks)

The package goes to the lenders whose appetite actually fits the deal — industry, size, structure, geography, and whether real estate is involved. Preliminary interest and a term sheet or proposal letter come back.

This is where working with a broker changes the calendar rather than just the outcome. Applying to one bank, waiting three weeks for a decline, and starting over is the most common way a 90-day timeline becomes a 150-day one. Appetite varies enormously between SBA lenders, and a decline from one tells you very little about the market.

Phase 4 — Underwriting and credit approval (2 to 4 weeks)

The lender's credit team works the file: cash flow and debt service coverage, your experience and background, the business's customer concentration and trends, the reasonableness of the price, and the structure of the equity injection. A business valuation is commonly ordered on acquisitions.

Expect conditions — additional questions and documents — rather than a clean yes or no. How fast you answer them is, again, your variable. A 48-hour turnaround on a condition list versus a two-week one is the difference between a four-week underwrite and an eight-week one.

Phase 5 — Commitment to closing (2 to 4 weeks, more with real estate)

After credit approval comes the closing checklist, and this is where third parties own the calendar: entity formation and good-standing certificates, licensing and permit transfers, landlord consent or a new lease, insurance including any required life insurance on the buyer, UCC and lien searches, and the closing documents themselves.

If there's real estate in the deal, add the appraisal, environmental review, title, and survey — the items covered in CRE vs. no-CRE SBA loans. None of these are hard. All of them take time you don't control, and several can only start once earlier items finish.

Phase 6 — Funding

Documents get signed, funds move, and the business changes hands. The last week is usually calmer than the four before it, assuming nothing surfaced late.

What actually makes a deal fast or slow

Two deals of the same size can be six weeks apart on the calendar. In our experience the difference is almost always on this list:

• Quality of the seller's financials. Clean, reviewed, reconcilable statements are the single strongest predictor of a fast close. Books that require reconstruction add weeks before underwriting can even begin.
• Your responsiveness. The buyer who returns a condition list the same day closes materially sooner than the one who takes ten days. This is the cheapest speed available to you.
• Real estate. The most common reason SBA closings slip. Budget for it at the LOI stage, not when the appraisal is ordered.
• Deal complexity. Multiple entities, partner buyouts, earnouts, rollover equity, and unusual seller note structures all add review time. They're often worth it — just schedule for them.
• Licensing and regulatory transfers. Liquor licenses, professional licenses, DOT authority, healthcare credentialing. These run on government calendars and can be the long pole in the whole tent. Find out what transfers apply in week one.
• Lender fit. A deal placed with a lender who has real appetite for it moves. The same deal at a lender who's lukewarm generates conditions endlessly.
• Landlord cooperation. A lease assignment or new lease needs a signature from someone with no stake in your closing date.

Working backward from a year-end close

September is when buyers start asking whether a December 31 close is realistic. It's a fair question with a real answer, and the answer is mostly about when the package goes out — not when you started looking.

Counting backward from the end of December, a business-only acquisition needs the complete package submitted by roughly the first half of October to sit comfortably inside a 60-to-90-day window. A deal with real estate wants it earlier — late September, realistically — because the diligence items are sequential and don't compress.

Then subtract the holidays, which people forget every single year. Late November through the first days of January is not a normal working stretch: underwriters take vacation, appraisers and environmental firms slow down, title companies and county recorders close, sellers travel, and attorneys go quiet. A file that needs "just two more weeks" on December 15 is realistically a mid-January close.

Where timelines slip

1. The LOI closing date was invented. Someone picked 60 days because it sounded reasonable, before anyone knew what the deal required. Build the date around the work, and negotiate an extension mechanism into the LOI while you still have leverage.
2. The document list sat for two weeks. The most common single cause of delay, and entirely preventable.
3. One lender at a time. A serial application process turns one decline into a month.
4. Nobody asked about licenses. A required transfer discovered in week eight is a schedule rewrite.
5. The seller's books didn't reconcile. Tax returns that don't match the P&L have to be explained before they can be underwritten.
6. The equity injection wasn't sourced. Lenders verify where the down payment comes from, and money that arrived recently from an unexplained source needs a paper trail. See how much down payment you need.
7. The appraisal came back low. Someone has to cover the gap, and the purchase agreement should already say who.

What to have ready on day one

• Three years of the business's tax returns and financial statements, plus current year-to-date interims.
• The signed LOI or purchase agreement, with real estate and business components priced separately if both are involved.
• Your personal financial statement and resume — the lender is underwriting you as much as the business.
• Proof of your equity injection and where it came from, seasoned and documented.
• A debt schedule for the business and, if relevant, for you.
• The lease, or the landlord's contact information if a new one is needed.
• A list of licenses and permits the business holds and what transferring each one requires.
• Your real deadline, and why it exists. It shapes the plan more than anything else on this list.

How this works with FTI

1. Consult. A free call to look at the deal and give you a schedule you can actually plan around — including whether the date in your LOI is realistic and what it would take to protect it.
2. Structure & package. We build the lender-ready package, get the long-lead items moving early, and answer the questions an underwriter would ask before they have to ask them.
3. Match & close. We take it to the lenders whose appetite fits and manage the process to funding. We've arranged $41.3M+ across 28 funded deals in 2025–2026.