Documents Required for SBA 7(a) Loan Approval When Buying a Funeral Home Business

When applying for an SBA 7(a) loan to purchase a funeral home business, collecting the right documents from the seller is critical. These documents allow lenders to thoroughly assess the financial health of the business and ensure compliance with SBA requirements. Proper documentation also streamlines the loan approval and closing process.

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Key Documents to Collect from the Seller

1. Business Financial Statements
   • Profit and Loss Statements (P&L) for the past 3 years
   • Balance Sheets for the past 3 years
2. Federal Tax Returns
   • Business tax returns for the past 3 years
   • Personal tax returns of the business owner(s), if business income flows through to personal returns
3. Current Year Interim Financials
   • Most recent Profit and Loss Statements (within last 60 days)
   • Most recent Balance Sheets (within last 60 days)
   • Business Debt Schedule showing any liabilities to be paid off at closing
   • Accounts Receivable Aging Report
   • Accounts Payable Listing
4. Reports Ordered by the Buyer’s Lender
   • Real Estate Appraisal (if property is included)
   • Independent Business Valuation
   • Phase One Environmental Site Assessment
   • Property Survey, often required by the title company for insurance purposes
5. Inventory of Business Assets Included in the Sale
   • Inventory list
   • Automobiles and vehicles owned by the business
   • Equipment and machinery
   • Furniture and fixtures
   • Legal description and details of any real estate involved
6. Pre-Need Contracts and Business Agreements
   • Copies of all prepaid funeral contracts (preneed agreements)
   • Key supplier contracts and vendor agreements
   • Employment contracts and non-compete agreements
7. Business Licenses and Permits
   • Valid funeral establishment license
   • State or local permits related to operating a funeral home
8. Organizational Documents
   • Articles of Incorporation or business formation documents
   • Bylaws or operating agreements

Additional Documentation Before Closing

• Customer and Supplier Lists: Detailed information about key customers and suppliers that impact ongoing operations.
• Seller’s Disclosure Statement: A full disclosure of any known liabilities, pending lawsuits, or other risks.
• Seller Non-Compete Agreement: Agreement from the seller restricting competition post-sale to protect your business interests.

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Why Proper Documentation Matters for SBA Funeral Home Loans

Having these documents ready and well-organized demonstrates professionalism and readiness, increasing the likelihood of loan approval and smoother due diligence. SBA lenders will scrutinize financial stability, cash flow, and asset valuation — all of which depend heavily on complete and accurate documentation.

If you are looking to learn more about financing options and loan requirements for purchasing a funeral home, check out our comprehensive guide on Funeral Home Financing and Loans.

For more details on what to expect during the sale process, visit our page on Funeral Home Business Selling Preparation.

Explore our full Funeral Home FAQs.