Congratulations. You've received SBA loan approval, and that's a major milestone worth celebrating.

But here's what catches many first-time buyers off guard: approval isn't the finish line.

It's more like reaching camp high up on the mountain before the final push to the summit.

SBA loan closings are fundamentally different from conventional financing. For example:

• They're more detailed
• More document-intensive
• Require a level of organization that surprises even experienced borrowers.

The good news? Once you understand what's coming, you can navigate it smoothly. That's exactly what this guide is designed to help you do.

Your Closing Checklist: The Roadmap to Funding

Shortly after approval, you will be assigned a loan closer who will issue you the full and complete closing checklist.

Think of this document as your roadmap to funding. Every item on it represents something that must be completed, verified, or submitted before a single dollar changes hands.

The checklist outlines every document, action, and verification required before funds are released.

Some items will feel familiar from underwriting. Others will be new. The key is treating this checklist as a living document that you'll work through methodically over the coming weeks.

The Critical Documents You'll Need

Your Purchase Agreement

One of the most critical items is a finalized and ready to execute purchase agreement that matches the approved terms.

If anything in your deal structure changed during underwriting (purchase price adjustments, seller note modifications, allocation changes) your purchase agreement needs to reflect those final numbers. Mismatches here create delays that frustrate everyone involved.

This purchase agreement will need to be reviewed by bank counsel to ensure all terms align and that the purchase agreement is SBA compliant. The purchase agreement can be signed prior to or at closing.

Entity Formation Documents

You'll need to provide entity documents including formation paperwork, operating agreements, and EIN confirmation, if you haven't done so already in the underwriting phase.

If you're forming a new entity to acquire the business (which most buyers do), make sure these documents are properly executed and consistent with what was represented during underwriting.

Insurance Requirements

Certificates of Insurance are required, and they need to name the lender appropriately while meeting specific coverage minimums. Your insurance agent should be familiar with SBA requirements, but don't assume. Verify that your coverage meets your lender's specific standards.

Here's one that catches people off guard: life insurance. Most SBA loans require coverage for the loan amount, and this needs to be applied for immediately. Life insurance underwriting takes time. Sometimes several weeks. It's actually one of the most common causes of closing delays. Don't wait on this one.

Lease and Property Requirements

For businesses operating in leased spaces, you'll typically need lease agreements along with landlord subordination or waiver forms. These forms protect the lender's interest in the business assets, and they require your landlord's cooperation. More on this challenge shortly.

Equity Injection Documentation

Your equity injection must be clearly documented using bank statements and proof of funds transfer. The lender needs to see where your down payment came from and verify it's been properly sourced. Keep these funds untouched and easily traceable until the loan closes. Moving money around or comingling accounts creates audit headaches that delay closings.

SBA-Specific Forms and Legal Documents

Expect to sign multiple SBA-specific forms during the closing process. These are standard but numerous. For more complex transactions, you may also need organizational resolutions or legal opinion letters. Your attorney and lender will guide you through what's required for your specific deal.

The Art of Coordination

Here's what separates smooth closings from chaotic ones: coordination. Successful closings require orchestration between you (the buyer), your attorney, your insurance agent, the seller, and the lender. That's a lot of moving parts, and each party has their own priorities and timelines.

My recommendation? Delegate responsibilities early. Before the checklist even arrives, identify who on your team will handle what. Your attorney should manage legal documents and review. Your insurance agent handles coverage requirements. You manage communication and ensure nothing falls through the cracks.

One of the most effective things you can do is proactively introduce all parties and create a shared communication loop. A simple email introducing your attorney to the lender's closing team, copying everyone who needs to be involved, sets the tone for collaborative problem-solving.

Maintaining Momentum

Tracking checklist progress weekly helps maintain momentum and keeps the lender engaged. I recommend a simple spreadsheet or shared document where you can mark items complete, note who's responsible for outstanding items, and flag any roadblocks.

Remember: the closing phase is largely about confirming and updating documents already reviewed during underwriting. Most items shouldn't require starting from scratch. This process is more about verification and finalization.

Common Delays and How to Avoid Them

Based on hundreds of closings, here are the delays I see most frequently:

Landlord hesitation. Landlords sometimes drag their feet on subordination forms, either because they don't understand them or because they want their attorney to review. Start this conversation early and be prepared to explain why the forms are necessary.

Insurance approval timelines. Life insurance underwriting in particular can take weeks. Apply the day you receive approval, not a week later.

Incomplete purchase agreements. Agreements that don't match approved terms, are missing signatures, or have ambiguous language create back-and-forth that costs precious time.

If closing timelines extend significantly, lenders may require updated financials; both yours and the business's. Staying prepared for this possibility saves scrambling later.

The encouraging news: Most closing issues can be resolved through early communication and solution-focused discussions. Lenders want to close these deals. Sellers want to complete the transaction. When problems arise, approach them as puzzles to solve together rather than obstacles to fight over.

Setting Your Target Date

Setting a realistic target closing date creates urgency and accountability for all parties. Work with your lender to establish this date, then communicate it clearly to everyone involved. Having a shared goal focuses attention and helps prioritize competing demands.

Every checklist item completed moves you one step closer to funding. Approach this phase with the same diligence you brought to due diligence and underwriting, and you'll be signing closing documents before you know it.

When you work with Pioneer Capital Advisory, we guide you through every step of the process. Use one of the links below to schedule a call if you want to explore working with us.

Coming in Part 2: We'll cover closing day itself - what to expect at the closing table, how disbursement mechanics work, and the final steps between signing and taking ownership.

For pre-LOI buyers ready to explore opportunities: Schedule a meet & greet call​

Already have a deal under LOI and need financing help: Schedule an LOI consultation​

Matthias Smith​
Pioneer Capital Advisory LLC

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Disclaimer: The information in this newsletter is for informational purposes only and should not be considered legal or financial advice. Business buyers are encouraged to consult with their legal counsel and accountant to ensure the proper structuring of their transactions and to fully understand the tax implications of seller financing.

Thanks for reading! Feel free to reply directly to this email with any questions or thoughts.