What happens after you submit a business loan application

What happens in underwriting?

Underwriting is the lender's review of your file to decide whether to lend, how much, and at what price. An underwriter reads your bank statements line by line, checks revenue and cash flow against your tax returns, runs your credit, searches for liens and judgments, and reviews your industry and purpose. Banks and SBA lenders add a credit memo and a committee.

You usually hear nothing during underwriting, which is normal. Typical length is hours to two days for online lenders, one to three weeks at banks, and two to six weeks for SBA loans. Underwriting has the short definition, and business loan requirements explains what the underwriter is measuring you against.

What are stipulations, and why do they keep coming?

Stipulations, or stips, are the items a lender needs before it will approve or fund: an updated bank statement, proof of insurance, a landlord waiver, a payoff letter for debt being refinanced, a signed personal guarantee, or an explanation of a large deposit. They come in waves because each answer can raise a new question.

Stips are where most applications stall, usually on items that depend on someone else, such as a landlord or an insurer. Answer each one the same day, send exactly what was asked for, and ask the lender for the complete list up front. The stips glossary entry lists the most common ones.

How do offers arrive, and how do you compare them?

An offer states the amount, rate or factor rate, term, payment and fees the lender is willing to provide. From online lenders it often comes as a short email or a screen with several options. From banks and SBA lenders it comes as a term sheet or commitment letter. If you applied once to many lenders, several offers may arrive over a few days, and some lenders will decline while others approve the same file.

Compare them on net amount received, APR including fees, total payback, payment, term, collateral and guarantee. How to read a term sheet walks through each line. Do not let a lender's deadline rush you past this step.

What happens when you accept a term sheet?

Accepting a term sheet tells the lender to move to final approval and documents. At a bank or SBA lender this is when the file goes to committee or final credit approval, the lender orders any appraisal or title search, and the closing checklist is issued. Some lenders charge a deposit at this point to cover third party costs; it should be refundable if the lender declines.

At an online lender, acceptance usually means you select an option on a screen and the closing documents are generated within hours. Either way, read the final documents against the term sheet. If something differs, ask before you sign; changes are easy before closing and expensive after.

What is in the closing documents?

The closing package contains the loan agreement, the promissory note, the security agreement that creates the lender's lien, the personal guarantee, disclosures, and authorization for automatic payments. Real estate loans add the mortgage or deed of trust and title documents. SBA loans add the SBA authorization and SBA specific forms.

Most lenders use electronic signatures and the package takes 20 to 60 minutes to sign. Read the guarantee, the prepayment clause, the default section and the payment schedule even if you read nothing else. After signing, the lender files a UCC financing statement with your state, which records its lien on business assets and is visible to future lenders. Personal guarantees explains what the guarantee commits you to.

When does the money arrive, and what should you do after?

Online lenders and cash advance companies typically send funds by ACH the same or next business day after you sign. Banks fund at closing, within a few days of final approval. SBA loans fund once the closing package is complete, often one to three weeks after approval. Equipment lenders pay the vendor directly. The net amount is the loan minus fees deducted at closing, so a $100,000 loan with a 3% origination fee delivers $97,000.

After funding, set up the payments so they never miss, calendar any reporting covenants, and keep the closing package in one place. At payoff, check that the UCC lien is terminated. If you applied through your AI assistant via our MCP server, it can track the offers and closing items for you; see the agents hub.