The Lender Package That Gets Your SBA Loan Approved
Most small-business acquisitions are financed with an SBA 7(a) loan, and the quality of your lender package has a direct effect on whether you get approved and how fast. Lenders see hundreds of requests, and a clean, complete package signals a serious, low-risk borrower.
Lead with debt service coverage
The single number an SBA lender cares about most is the Debt Service Coverage Ratio, or DSCR: the business’s cash flow divided by the annual loan payments. Lenders generally want to see a DSCR of at least 1.15 to 1.25, meaning the business generates 15 to 25 percent more cash than it needs to cover the debt. Build your projections around this number and show your assumptions clearly.
Tell a complete story
A strong package includes a loan request memo, three years of financial projections, a business overview, a personal financial statement, and a collateral summary, all structured the way lenders expect to receive them. Gaps and inconsistencies force the lender to ask questions, and every question adds weeks. Anticipate what they need and provide it up front.
Show the lender you can run it
Beyond the numbers, lenders are underwriting you. Your relevant experience, your plan for the transition, and your understanding of the business’s risks all matter. A borrower who clearly understands what they are buying and how they will service the debt is far easier to approve than one relying on optimism.