Business Loan Timeline

On every loan request I receive I’m asked how long the process will take. What most business owners don’t know is that the longest part of the process is typically gathering up a complete due diligence package of information. The clock never starts with the business lender until they have¬† complete package. In our experience, the time gathering the package can range from a week to 2-3 months. After the complete package is submitted the following actions take place.

48 hrs to one week will be need to underwrite and gain an initial response to your loan. This process can take some bankers up to 3 weeks; however, our process trims this time to a week.

Once an interest is expressed by the lender in your loan, they will take anywhere from 2-3 weeks to gain a bank approval. This is given to you in the form of a commitment letter. Don’t mistake a Letter of Intent or (LOI) for a commitment letter.¬† During this time additional documents may be requested. It is critical that you are responsive in order to keep things moving at a quick pace. If the banker is waiting on you, there is a good chance your loan is just sitting.

Deals requiring an appraisal, environmental, or other third party reports should plan on an additional 3-4 weeks at this stage in the process. That is the normal timeline it takes to get these reports back to the lender.

Once the reports are done and received by the commercial banker, docs are drawn up for your loan request. Some lenders can turn docs around in a few days while others may take a week.

All in all, borrowers should plan on 30 days for a hard commitment from a lender. It will then take anywhere from 15-30 days after the commitment is issued before you will be at the funding table. It is possible for things to move at a faster pace but is unlikely for the general request.

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