No bank can approve your loan before the LOI. Three other things can be settled, and they decide the deal.

Four facts about your own file, settled before you are in a hurry

Every one of these is fixable in advance and painful to discover in week three. None of them requires a target business, which is exactly why they belong here rather than later.

1. Your credit, read the way a bank reads it. There is no magic cutoff score, and a number on a consumer app is not what the lender pulls. What moves the needle is the pattern: recent delinquencies, collections, the ratio of balances to limits, and anything that looks like a business being funded by personal cards. How banks actually read the file is worth ten minutes, and if something needs cleaning up, it needs months rather than days.

2. The cash you can genuinely inject, not the cash you have. Plan on roughly 10 percent of the total project cost, and note that total project cost is more than the purchase price: it picks up working capital, closing costs and the fees. The money also has to be yours to spend, seasoned and documented, which is not the same as visible in an account today. Retirement money, gifted money and borrowed money each come with their own handling. The four sources lenders accept covers the catch on each one.

3. Whether your experience fits what you are about to buy. Lenders weigh management experience, and the weight rises as the business gets more specialised or more licence-dependent. You do not need to have run the same business, but you do need a story that survives an underwriter's reading, and where the story is thin the usual answer is a stronger transition plan or a manager staying on. Better to know which of those you need before you are negotiating it.

4. Delinquent federal debt, and anything else that disqualifies. Ask the question out loud rather than assuming. A defaulted student loan, unfiled returns or an open tax lien will stop a file, and every one of those takes real time to resolve. There is nothing worse than losing a deal in week six to something that was true in week zero.

Do these four and you can walk into any lender conversation with a target and start at the deal instead of starting at yourself. That alone typically saves a fortnight.

Four terms that decide whether the financing survives

A letter of intent is usually non-binding on price and terms while binding on a few specific things, commonly exclusivity, confidentiality and who pays for what. Which parts bind varies by letter, so have your attorney read the ones that do. These four terms are the ones that quietly decide whether an SBA deal can be financed at all, and all four are much cheaper to get right now than to renegotiate later.

1. An exclusivity period that fits an SBA timeline. Funding commonly takes 60 to 90 days from accepted offer, with diligence running alongside underwriting rather than ahead of it. A 30 or 45 day window does not fit that, and the predictable ending is an extension negotiated after you have already spent money, which the seller knows. Ask for 90 days where the deal carries real estate, a landlord consent or a licence transfer, because those are the clocks nobody in the room controls.

2. A financing contingency that names the financing. Make the deal conditional on obtaining acquisition financing on commercially reasonable terms, and be specific enough that the condition means something. A vague contingency is an argument waiting to happen at exactly the moment you least want one.

3. Access to the records the lender will demand. Your lender will want business tax returns, interim statements, the debt schedule, the lease and the customer detail, and the underwriter will want them reconciled to each other. Write the access into the letter. Seller financials that do not tie to the tax returns are one of the most common reasons a file adds a month, and discovering that in week five is materially worse than discovering it in week one. The diligence checklist is the full list of what to demand once the letter is signed.

4. The shape of the deal, at least in outline. Most SBA change of ownership deals are structured as asset sales, and that is not a detail you want to reopen in week six, because it changes the tax outcome for the seller and can change the price they will accept. What each structure transfers is the short version. Sketch the seller's role after closing in the letter too. Lenders limit how long a seller can stay involved in a business they have sold, so agree the transition in principle now and confirm the specific limit with your lender rather than assuming a number.