Closing before SBA funding

by a searcher

9 months ago

Hello all,

Can you close and change the ownership of business before funding happens ?  Bank is going to take another 3 weeks before they can fund it. But Seller wants to close on first of month to keep the books clean. 
 
What things needs to be true in order to Close / change the ownership of prior to bank funding.

this is an asset purchase .

thanks in advance.

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3 comments

searcher from Southwestern University

The SBA isn't really big on "last minute changes". Or "changes". If you're going to close prior to bank funding, you'll need the owner to accept delayed payment. And you need to accept the risk that the bank will change their mind - a "feature" of 2023.

If the seller wants to close on the 1st of the month and it's going to take 3 weeks for the bank, close the 1st of the following month. There's probably more going on here than meets the eye.

9 months ago | like reply | 0 likes

intermediary from The University of Chicago - Booth School of Business

Closing before funding is risky. If both sides try to protect themselves if deal does not close, then the legal docs cost will be high depending on the lawyers.
There are other ways to keep closing clean. happy to discuss. DM me.

9 months ago | like reply | 0 likes

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