Unveiling the Hidden Narratives: Key Questions in SBA Underwriting

When diving into Small Business Administration (SBA) underwriting, it’s crucial to look beyond the financial statements. Underwriters often seek answers to specific questions that unveil the story behind the numbers. Here are five essential points that can shape the narrative:

1.	Customer Mix:

Understanding the composition of your customer base is vital. Are there any dominant clients, and what percentage do they contribute to revenue? How diverse is your customer portfolio? These insights provide underwriters a holistic view of customer dependencies. 2. Seller’s Current Role and Duties: The role of the seller post-transaction is a key consideration. Are they staying on board? If so, in what capacity? Clear communication about the seller’s involvement helps underwriters assess continuity and potential challenges during the transition. 3. Key Employees in the Business: Identifying and highlighting key employees is essential. Underwriters want to know about key personnel and their roles. Employee retention is a significant factor, as it directly impacts the business’s operational stability post-acquisition. 4. Age of Equipment (if applicable): For businesses with significant equipment, the age and condition of machinery play a role in assessing long-term viability. Providing details about the equipment’s age and any plans for maintenance or upgrades can address potential concerns. 5. Special Permits or Licenses Needed: Certain industries require specific permits or licenses. Clearly outlining the regulatory aspects and ensuring compliance is crucial. Highlighting any unique permits or licenses needed gives underwriters confidence in the business’s adherence to legal requirements.

In conclusion, SBA underwriting goes beyond the numbers, delving into the intricacies that define a business.

By addressing these questions, you not only enhance transparency but also provide a comprehensive narrative that strengthens your case during the underwriting process.

Remember, telling the full story is key to securing SBA financing for your business.