Car Wash Financing – SBA Does Not Stand For Slow Bank Approval
Some of you that have applied for hand car wash houston tx financing in the past might think that SBA stands for “Slow Bank Approval.” While it is true that you might be able to get approval from a local bank sooner, most of the larger SBA lenders have a very good underwriting process. If you approach a local bank that only has a few branches frequently they will be able to approve your loan quicker. That is if they will approve your loan. A lot of your loan approval has to do with the person you are dealing with that is with the lender. If you’re dealing with a person that has not been an SBA lender very long and does not have a lot of experience they will typically take longer to package your loan than a seasoned SBA lender. I would probably ask the business development officer how long they been a lender and how long they been with the particular bank. Many times if they are new with the bank they will not be familiar with the underwriting guidelines might not be able to give you accurate information in terms of how long it will take to underwrite your loan. It might even be wise to find a different account representative with the same bank if you are not impressed with their qualifications.
Many SBA lenders have their own forms they insist that you fill out, even though they are all basically the same SBA forms. Many of them will not look at your loan unless you have filled all of these forms out, signed them and dated them. If you’re applying to multiple SBA lenders this can be difficult.
The speed of your SBA loan approval will also be directly related to what type of SBA lender they are. If they have preferred lender status or PLP, they frequently will approve your loan faster than someone who is a certified or a CLP lender. In some instances, sometimes it will just take longer. For example, if the borrower has an arrest record the loan will have to be submitted through an SBA office instead of just underwritten at the bank. If there is an environmental issue this might also be the case. This will take longer regardless if it is a PLP or a CLP lender. Some banks hardly do any SBA loans all and they frequently take longer than PLP and CLP lenders. When you are talking to your contact at the bank find out if they are a PLP or a CLP lender.
Here are some tips about getting your SBA loan approved faster: Make sure your file is organized. Nothing turns a lender off more than to get a package of information where there is no organization at all the package. Make sure all your tax returns are put together separately. Put all of your files in numbered sequence. If you have a purchase agreement make sure all pages and schedules are there. Start the file off with an executive summary and state exactly what the loan is for. Make sure that you include the usage of proceeds so people can figure out what the loan is for, including closing costs, working capital, inventory, any seller held seconds and additional soft costs.
Make sure your forms are filled out completely and are signed and dated. Again, many lenders will not process loans and approve them unless the forms are signed.
Make sure your financials are current. If the financials are not correct you probably will not obtain a loan approval. If this is a construction loan make sure you have included your pro forma projections and your feasibility studies that might have been done. Make sure that any pro forma projections that you have done are in line with industry standards. Underwriters will verify that your projections are in line with industry standards. If they are not they will not have confidence that you will be a qualified candidate that understands this business or property.
Make sure that you have valid agreements. If you have a purchase agreement that is not signed or is no longer valid many underwriters will not work on the file at all.
These tips should help you get a faster approval and make it a more pleasant process.