Business loan closing moves from commitment letter through loan document review and signing (wet or e-sign) to funding — typically within 5–15 business days of commitment for conventional loans, faster for alternative lenders — with UCC-1 lien perfection and (for SBA loans) SBA authorization as the final legal steps before or after funding.
Once underwriting is complete, the lender issues a commitment letter (sometimes called a loan commitment or term sheet). This document specifies the loan amount, interest rate, term, collateral requirements, conditions precedent to funding, and expiration date of the commitment. Read it carefully: conditions precedent are items the borrower must deliver before the lender funds — updated financials, insurance certificates, copies of signed leases, UCC lien releases from prior lenders. Missing a condition precedent is the most common reason a committed loan doesn't close on schedule.
Loan documents for a commercial transaction typically include: a promissory note (the core repayment obligation), a loan agreement or credit agreement (covenants, events of default, representations and warranties), a security agreement (describing the collateral and granting the lender its lien), a personal guarantee (unlimited or limited), and — for real-estate-secured loans — a mortgage or deed of trust. For SBA loans, the package also includes SBA Form 1050 (Disbursement Request and Authorization) and the SBA Authorization document, which the SBA issues to confirm the loan is within the SBA's guarantee program. Per SBA SOP 50 10, lenders must retain executed originals of all loan documents for the life of the loan plus three years.
Wet closings require physical signatures on original paper documents — required by most banks for real-estate-secured commercial loans and for SBA loans. Electronic closings (e-sign) use platforms like DocuSign or similar services. The enforceability of e-signed commercial loan documents is governed by the Electronic Signatures in Global and National Commerce (ESIGN) Act and the Uniform Electronic Transactions Act (UETA), adopted by 49 states. Most alternative lenders and fintech lenders close 100% electronically; most bank SBA loans still require wet signatures on the note and guarantee.
After document execution, the lender funds — wiring proceeds to the borrower's business bank account. For most alternative and bank term loans, funding occurs within 1–3 business days of signed documents. Simultaneously (or immediately after funding), the lender files a UCC-1 financing statement with the Secretary of State in the borrower's state of organization to perfect its security interest in the pledged collateral. UCC-1 filing timelines vary by state — most states process filings within 1–5 business days. Until the UCC-1 is filed and accepted, the lender's lien exists contractually but may not be enforceable against third parties (prior creditors, bankruptcy trustees).
Day 0: Commitment letter issued. Days 1–3: Borrower reviews docs, satisfies conditions precedent (delivers insurance cert, signed lease, life insurance assignment). Days 4–5: Loan docs prepared and sent for wet signatures. Days 6–7: Signed docs returned. Days 8–10: SBA Authorization issued. Day 11–12: Lender funds via wire transfer. Day 12–14: UCC-1 filed with Secretary of State. Total: roughly 12–14 business days from commitment to funded — matching the 5–15 day window cited across most SBA lender networks.