This SBA 504 Loan video goes over a mock timeline of events for a typical SBA 504 small business loan. For easy reference, see the full transcript below the video.
The following represents a mock timeline of events for a typical SBA 504 loan involving new buildings starting at the time all required information has been submitted:
i. All required information is submitted (start of process).
ii. Bank reviews and formally approves (subject to SBA approval)/rejects request: 2-3 weeks.
iii. CDC reviews and formally approves (subject to SBA approval)/rejects request: 3-4 weeks (Note: some CDCs will start their review process prior to receiving bank approval which can speed things up.)
iv. CDC puts final package together and sends to SBA for approval: 1 week.
v. SBA reviews and formally approves/rejects request: 1 week.
vi. If approved, bank prepares construction line documents and closes construction line or lines: 1 week.
vii. Bank allows advances/draws on the line of credit to pay for qualified project costs according to their policies for administering construction lines of credit: 6-12 months.
viii. Upon building completion and certificate of occupancy, the CDC gathers necessary documentation, obtains title opinion, closes final documents with borrower and submits to SBA for funding approval: 1-2 weeks.
ix. SBA reviews and issues formal approval to fund: 2 weeks.
x. CDC makes final preparations to fund SBA guaranteed CDC loan and schedules funding date: 1 week.
xi. CDC funding occurs, generally within 30-45 days, and pays down bank construction line debt.
xii. Bank closes permanent bank loan with borrower.