Before we get into that guidance, let’s make sure you’re up to speed on what actually goes into your loan approval and funding and why it takes as long as it does.
(If you already know how all this loan stuff works, feel free to skip to the next section.)
You can think of the financing process as having three parts:
The first part, applying, lies mostly in your hands. In this step, you usually have to fill out an application and submit some documentation (like tax returns, bank statements, and business plans).
Sometimes your lender will ask for more information or additional documents, which can slow things down. Some lenders also have a multiphase application, in which you initially apply online and then have to talk to someone on the phone. If you’re waiting for a phone call, things will take longer.
Once your application is in, it will have to go through underwriting. That just means that your lender is looking at everything to make sure you qualify for financing (and what loan amount and interest rate you qualify for). Some lenders offer automated underwriting that takes a few minutes, while others use manual underwriters that can easily take days.
If everything gets approved, it’s on to funding, in which your lender actually gives you the money. If they deposit funds into your bank account, this can take as little as a few hours. But if they send you a check, you may have to wait a few days for your mail to arrive.
Each step of this process can be affected by a number of factors. So let’s discuss those.