What happens at an SBA loan closing?
Short answer
The lender closes the loan under the SBA Terms and Conditions. You sign the note, guaranties, lien documents and required certifications, and the lender confirms collateral and equity. The closing file generally stays with the lender. Source: SOP 50 10 8.1, Sec. B, Ch. 6, Para. D.
The lender closes the loan and you sign the loan documents. SOP 50 10 8.1, Sec. B, Ch. 6, Para. D (p. 207) covers closing for all 7(a) loans. SBA's lender page says lenders are expected to close 7(a) loans the same way they close non-SBA loans.
What you sign
- A note. The lender may use SBA Form 147 or its own (Para. D.4).
- Guaranties, on SBA Form 148 or 148L or the lender's form.
- Lien documents, which must carry SBA's required federal-law language.
- Certifications about your finances, taxes and ongoing compliance (Para. D.8).
What the lender must have
- All required collateral, with proof of lien filings (Para. D.5).
- A verified equity injection, except on SBA Express and Export Express (Para. D.3).
- Required insurance, appraisals and tax verification.
How money moves
The lender must disburse under the SBA Terms and Conditions and document each disbursement. You and the lender sign SBA Form 1050 or an equivalent at first disbursement. SBA Express, Export Express and 7(a) Small loans are excepted (Para. D.3).
Acceptable proof includes joint payee checks, paid invoices and electronic transfer records.
What stays with the lender
The lender generally does not send SBA the closing file. It reports through SBA Form 1502 (Para. A).
Signing online
Electronic signatures are allowed on closing documents unless the recording office requires wet ink (Appendix 10, p. 347).
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