2026-01-20
How to Prepare Your Financials for SBA Lender Review
Financial readiness is one of the most important factors in the SBA underwriting process. Lenders need clarity, consistency, and documentation that supports stable cash flow. Buyers who prepare documentation early move faster through underwriting and limit the number of follow-up requests.
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A strong financial package begins with accurate, reconciled statements. Lenders expect P&Ls, balance sheets, and tax returns that align with one another. Buyers must ensure any discretionary add-backs are reasonable and well-supported. For eligibility and documentation reference points, see SBA Loan Requirements.
Normalized cash flow analysis is critical. Lenders need to understand what earnings will look like once the buyer assumes operations. Removing owner-specific expenses, personal benefits, and one-time costs creates a clearer picture of true cash flow. For examples of how lenders think about acquisition underwriting, refer to Funding an Acquisition with an SBA 7(a) Loan.
Forward-looking projections also matter. Lenders evaluate whether the business can support debt service under realistic assumptions. Including conservative forecasts and thoughtful transition planning increases lender confidence. Similar considerations appear in scaling-related capital needs discussed in Scaling Operations with SBA 7(a) Loan.
Personal financial readiness also plays a role. Borrowers must provide updated personal financial statements, tax returns, and liquidity documentation. Lenders want to confirm the buyer can contribute required equity injection and absorb minor shocks post-transaction.
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