SBA franchise loan timeline by week. What underwriting, commitment, closing, and funding actually involve, plus 9 reasons most files run 60-90 days instead of 30.
If the bank quoted 30 days, that’s the SLA for a clean file — every document in, every signature collected, every conditional cleared on the first pass. Almost no franchise file is clean on the first pass.
Realistic 7(a) franchise timing is sixty to ninety days from underwriting-start to funds-disbursed. Faster means the loan is under $500K, the franchise is on the SBA Franchise Directory with zero recent amendments, your financials are pristine, and the lender is PLP-delegated. Slower — four to six months — means something on the nine-item delay list below is happening to you, and nobody at the bank has volunteered which.
For background, see the complete SBA franchise loan guide and what credit score franchise SBA lenders actually require.
By end of week one, the lender needs:
The underwriter runs three workstreams in parallel: building the credit memo, reading the FDD across Item 7, the Item 19 financial performance section, and the disclosure of unit-count history, and ordering external reports (appraisals, Phase I, business valuations for resales).
If you’ve been asked for additional documentation more than twice in these three weeks, you are off the 60-day track.
A commitment letter arrives between days 14 and 28. Most buyers scan the rate, sign, and send it back the same afternoon. This is the most expensive five-minute decision in the process.
The commitment letter is a conditional approval — binding on you, not yet binding on the bank. Before countersigning, verify line by line:
Once you sign, negotiating power shifts permanently to the bank.
Run the actual numbers before signing. Plug the final rate, term, and SBA fee into the franchise investment calculator and model monthly payment against your Item 19 revenue figures. If DSCR drops below 1.25x under the real terms, that’s a conversation to have with the lender before closing, not after.
The closing package: SBA note, Form 1050 authorization, personal guarantees from every 20%+ owner, security agreements, UCC-1 filings, insurance binders naming the lender as loss payee, life insurance assignment (loan >$350K), and — for real estate — title, survey, and closing disclosure.
Three items kill more deals at the buzzer than anything else:
Business insurance binders. GL and property at $1M/$2M with the lender as additional insured and loss payee. Agents new to SBA fumble the required language. Start week four.
Life insurance assignment. A new term policy in the loan amount, assigned to the bank, before closing. New-policy underwriting runs 4-6 weeks — apply the day your commitment letter arrives.
Final cash injection verification. The bank pulls fresh statements at closing. Money moved during closing — even for inspections or pre-opening costs — triggers an immediate pause.
A signed closing doesn’t mean funded. SBA loans disburse against your use-of-funds breakdown in three buckets:
Your contractor cannot start until the lender approves the first draw. If you’re 15 days past closing with no movement, the most common causes are a missing UCC filing, an unfunded insurance binder, or an SBA Form 1050 hold. Call the closer (not the loan officer) and ask which conditions are open.
In order of frequency:
The first four are largely unavoidable. The rest are preventable. If your file has stalled and the bank isn’t volunteering why, work backward through this list.
| Phase | Weeks | What the Bank Is Doing | What You Should Be Doing | Common Delays |
|---|---|---|---|---|
| Underwriting | 1-3 | Building credit memo, pulling tax transcripts, reading FDD, ordering appraisal/Phase I | Returning doc requests in 24h, getting franchisor to return lender addendum, applying for life coverage if loan >$350K | IRS transcript backlog, FDD amendments, cash injection sourcing |
| Commitment | 2-4 | Issuing conditional approval, listing closing conditions | Reading line-by-line, verifying SBA fee/prepay/lien position, pushing back before signing | Term negotiation, spousal guarantee discussions |
| Closing prep | 4-6 | Ordering title work, drafting note, verifying policies | Getting binders with correct language, finalizing the life policy, keeping cash injection untouched | Policy language errors, life-policy underwriting |
| Closing | 5-6 | Executing documents | Signing, providing final statements, confirming wires | Final cash injection verification, missing spousal PG |
| Funding | 5-7 | Wiring franchise fee and working capital; equipment draws | Coordinating with franchisor, contractor, vendors on draw timing | UCC filings, unfunded binder, SBA 1050 holds |
On track, you move one row per week. If two consecutive rows take longer than expected, get the loan officer on a 15-minute call to identify what’s blocking.
Before submitting any SBA application, the $49 VetMyFranchise report walks Items 3, 7, 19, 20, and 21 of the FDD so you know what your lender will see. Reviewing this before application is far cheaper than discovering an Item 20 unit-closure problem in week three of underwriting.
If your file is denied rather than slowed, see what to do after a franchise loan denial. For build-out, training, and soft opening, see the brand opening timeline from signing to launch. For a lender shortlist, see the best SBA lenders for this kind of deal.
Sixty to ninety days from a complete application to funded for a clean file. Files with missing documentation, FDD amendments, real estate appraisals, or environmental reviews routinely run four to six months. The clock starts when underwriting has every document it needs, not when you first email the lender.
Approval comes as a commitment letter — a conditional approval, not a final yes. After you countersign, the lender moves into closing: final title work, insurance verification, life insurance assignments for loans over $350K, personal guarantees, and SBA Form 1050 authorization. Closing runs two to three weeks. Funding disburses 7-21 business days after closing documents are fully executed.
Seven to fourteen business days is typical for working capital and franchise fee disbursements. Equipment and leasehold draws run on a separate schedule — the lender pays vendors directly against invoices rather than wiring you a lump sum. If funds aren't moving two weeks after closing, ask the closer which conditions remain open — usually an insurance binder or a missing UCC filing.
Franchise files carry a second review layer: SBA Franchise Directory eligibility, a franchisor pre-approval addendum, and FDD review across Items 7, 19, and 20. If the FDD was recently amended or the franchisor is slow returning the addendum, the file waits.
Sometimes — through SBA's Small Loan Advantage program for loans under $500K with strong borrower profiles, or through PLP-delegated lenders that can issue SBA authorization without sending the file to Sacramento. Neither expedites the bank's own underwriting; both shorten SBA-side review from 5-10 business days to same-day. Most of your timeline is the bank, not SBA.
This page is part of VetMyFranchise. View all pages: llms.txt · llms-full.txt