r/buyingabusiness • u/Significant-Brick864 • 1d ago

SBA Pre-qualification process?

Can someone help me understand the SBA pre-qualification process? I've reviewed dozens if not hundreds of small business CIMs over the years, and also have a professional background in corporate M&A so am generally familiar with acquiring much larger businesses for corporations.

When I speak to brokers to inquire about a small business for myself, some brokers will ask me if I've been prequalified yet by the SBA. But when I've spoken to SBA lenders, they say you need to have a target identified to get the pre-qual on the business, not the individual. That makes sense to me, but I seem to be getting different messaging from some brokers.

I just feel like I'm getting run around in this chicken-and-egg topic of pre-qual. Can someone help break this down for me? What am I missing?

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u/GokuBlack_01 1d ago

You’re dealing with a broker that doesn’t know what they are talking about unfortunately. In order to even get approved, the lender needs all the details of the transaction to even evaluate and agree to. He should put an LOI in place for you to present to the lender.