Glossary · Doing the deal
Pre-approval
In short
A preliminary assessment by a lender indicating how much you might be able to borrow for a business acquisition, based on your financial profile. It confirms your eligibility and capacity before you make an offer.
What it means in a deal
Getting pre-approved for an SBA 7(a) loan is crucial before seriously looking at businesses. It tells sellers and brokers you're a serious, qualified buyer and speeds up the Letter of Intent (LOI) and due diligence process. A pre-approval signals that your personal credit, liquidity, and experience meet initial lender requirements.
Related terms
Common questions about Pre-approval
- Which pre-closing business expenses can count towards equity?
- What documentation is required if a business owner contributes pre-existing business equipment as equity?
- Can I pre-qualify for an SBA 7(a) loan before finding a specific business?
- Are pre-closing legal and accounting fees eligible to be counted towards my equity injection?
- If I contribute inventory purchased pre-closing for the acquired business, can it count as equity?
- Can pre-closing legal and accounting fees associated with the acquisition be counted towards my equity injection?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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