Enhancing SBA Loan Closing Efficiency with Specialized Escrow Services

SBA lenders step up to help small businesses access critical funding—and demand is growing fast.

Over 70,000 were approved in 2024 alone—a 22% increase from the previous year!

But with that growth comes pressure: more paperwork, tighter timelines, and greater complexity. To keep deals on track, many lenders are turning to specialized escrow partners who help manage documents, coordinate disbursements, and ensure compliance every step of the way.

In our continuing effort to bring you the most helpful, real-world insights, we spoke with Matthew Mapes, SVP/SBA Lender at Bell Bank, to understand what really slows down SBA closings—and how the right escrow partner can make all the difference.

Why SBA Loans Are a Smarter Fit for Small Businesses

The SBA Lending Landscape: Types of SBA Loans and Challenges

Not every SBA loan is created equal. Programs like the 7(a) and 504 loans are especially common among small businesses, but they also tend to involve more moving parts, making specialized support critical for lenders.

Which SBA Loans Need the Most Support?

• SBA 7(a) Loan
  This is the most common SBA loan. It’s flexible and covers everything from working capital to real estate purchases.
• SBA 504 Loan
  Designed specifically for real estate and major equipment purchases, 504 loans typically involve multiple parties, including a Certified Development Company (CDC). This makes coordination, document management, and fund disbursement more complicated.

Why SBA Lenders Feel the Pressure

Ensuring a smooth SBA loan closing is about staying organized, compliant, and on schedule. This isn’t easy as SBA lenders manage shifting timelines, evolving requirements, and multiple stakeholders.

1. Compliance Pressures
   As Mapes points out, “SBA lenders must underwrite the transaction as presented—including buyer equity injection, seller note terms, and more.” SBA loans must meet strict government guidelines. Every document must be verified, every condition must be met before closing, and disbursements must follow SBA timelines and procedures to the T.
2. SBA Policy Shifts Complicate Closings
   SBA lenders are dealing with a wave of regulatory changes. The newest version of the SBA’s SOP (50 10 8), effective June 1, 2025, rolls back many of the post-2021 updates and brings back some older requirements—impacting rules around loan sizes, startup equity, and refinancing. SBA guarantee fees were also reinstated this March, marking yet another update in an already shifting landscape.
3. Multiple Parties, More Complexity
   Lenders must coordinate across borrowers, attorneys, brokers, the SBA itself, and in some cases, CDCs.
4. Timely Disbursements
   The pressure doesn’t let up even after approvals because disbursement isn’t automatic. SBA lenders need to carefully track when and how funds are released, with strict documentation to back up every step.

“The two main items that cause delays are changes to the deal structure late in the process and delayed third-party reports,” says Mapes. “Even minor modifications can trigger re-approvals. Valuations, landlord consents, or lien releases—if they lag, everything else does too.”

Why SBA Lenders Count on Specialized Escrow Support

For SBA lenders, accuracy and timing aren’t optional, they’re everything. This is where you can really use the help of escrow services to ease your burden.

Escrow professionals serve as neutral third parties, overseeing the management of funds and documents while ensuring compliance and keeping everything on track—help lenders stay ahead of issues before they become delays.

“An experienced escrow partner is often the unrecognized hero of a smooth closing.” – Matthew Mapes.

Here’s how Escrow Services Can Be Your Behind-the-Scenes Ally

• Ensure Compliance: Escrow teams are well-versed in SBA regulations and help verify that every requirement is met before closing. Skilled escrow teams collaborate with attorneys and lenders to ensure everything is compliant—without last-minute rewrites.
• Handle the Paper Trail: From disbursement forms to borrower certifications, escrow professionals manage and organize all the necessary documentation.
• Keep Things Moving: Timely disbursements are critical. Escrow services help lenders stay on track and avoid missed deadlines that could put loan guarantees at risk.
• Centralize Communication: With buyers, sellers, brokers, and lenders all in the mix, escrow often becomes the communication hub—collecting signatures, resolving questions, and keeping expectations aligned.

Finish Strong with the Right Escrow Partner

According to Mapes, “When SBA and escrow are aligned early, deals close faster, cleaner, and with fewer surprises.”

Arizona Escrow & Financial helps SBA lenders coordinate every step of SBA loan closings with precision and care. Our experienced team keeps your transaction on track, so you can focus on growing your business.

Ready to simplify your SBA loan closing? Contact AEF today to learn how we can support your success.