What Experts Want You to Know About SBA Lending and Why Escrow Matters

If you’re an SBA lender trying to get a deal across the finish line, a good escrow partner might just be your unsung hero.

Last month, we spoke with Matthew Mapes, SVP and SBA lender at Bell Bank, about the growing demands of SBA loan closings and how experienced escrow support helps streamline the process.

In this follow-up, we’re expanding the conversation. Joining Matthew is Daniel Foley, SBA Loan Officer at Evolve Bank & Trust.

This time, we’re stepping back and sharing their perspectives in their own words, offering a direct window into the experiences of SBA lenders and how the right escrow partner helps them close with confidence.

SBA Lender Experience: In Their Own Words

What parts of the SBA loan process tend to cause the most delays or complications?

Daniel Foley (DF): “Two issues come up most often. First, gathering documents. Sellers often don’t have updated financials or tax returns ready, and buyers may not have their down payment funds verifiable at underwriting. I really like it when there’s a good business broker involved because the business broker often helps them get coordinated and prepared prior to hitting the market.

When it comes to buyers, sometimes they aren’t prepared with their down payment, assuming it’ll come together before closing. But it needs to be verifiable at underwriting. Many also find the business plan and financial projections requirements daunting. I coach buyers through business plan requirements with templates and feedback. It’s actually the most enjoyable part of my job!”

He adds: “I stay on top of things with a weekly or biweekly SBA checklist, and I send buyers a due diligence guide early to help them prepare.”

Matthew Mapes (MM): “The two main items that cause delays are late changes to the deal structure and delayed third-party reports. These are often connected—SBA lenders must underwrite the transaction exactly as presented, so even minor changes to things like equity injection or seller note terms can trigger re-approvals. Reports like valuations, landlord consents, lien releases, or life insurance policies can also push back closings if they’re not proactively managed.”

What makes an SBA loan a better fit for small businesses compared to traditional financing?

MM: “SBA loans are designed to reduce capital barriers and support buyers. The lower equity requirements, typically just 10% down, and longer repayment terms make a significant difference in early cash flow. Plus, SBA loans can be approved based on cash flow and buyer strength, not just collateral. That’s a game-changer for businesses with high goodwill.”

DF: “SBA loans let buyers leverage their capital more effectively. At Evolve Bank, we’re primarily focused on acquisition lending and still support 10% down in many cases. It’s a much more borrower-friendly structure. Conventional lenders typically shy away from acquisitions or startups, and when they do step in, the terms are usually far less favorable for the borrower.”

What specific benefits do you see when an experienced escrow partner is involved?

DF: “An experienced escrow partner, like Arizona Escrow, is critical. Anyone who’s worked in mergers and acquisitions will advise you to carefully select your escrow partner. I can’t emphasize enough that you don’t want to go through several months of work only to have to come to a grinding halt over a problem that could have been avoided.

A good escrow partner provides safety by protecting both parties throughout the process. They also provide clarity on what will happen and what to expect from start to finish. These two components are key to reaching the ultimate goal of completing the transaction with both parties happy.”

“This is not hyperbole, I’ve seen transactions go sideways because of an inexperienced escrow team.” – Daniel Foley

MM: “There are three main areas where a strong escrow partner really shines.

1. Timing coordination: Escrow officers familiar with SBA nuances can proactively align fund disbursements with 7(a) requirements—avoiding wire delays and last-minute funding issues.
2. Document precision: SBA closings demand exact language in documents like the Bill of Sale and Promissory Notes. Experienced escrow teams work seamlessly with attorneys and lenders to ensure everything is compliant without scrambling at the eleventh hour.
3. Communication hub: With buyers, sellers, lenders, and brokers all involved, escrow becomes the anchor: gathering signatures, resolving last-minute questions, and keeping everyone on track.”

Closing SBA Transactions is a Team Effort

Thanks again to Matthew and Daniel for their valuable insights and advice. They’ve shown how important communication, coordination, and trusted partners are to closing an SBA transaction.

If you need support with your SBA transaction, Arizona Escrow & Financial brings nearly 50 years of experience to help you close with confidence.

Contact us today!

**Editor’s Note: Responses have been edited for clarity and brevity.

Contributors for this article are: