How to Streamline the Application Process
Marlon Samuels recommends small business applicants take the following steps to streamline the application process.
- Gather the needed documents before applying. You can work with a technical assistance provider like the CT Small Business Development Center (SBDC) for free.
- Post-Approval Most of the obstacles Pursuit is seeing are happening in this phase.
- After you’re approved, you’ll receive a commitment letter from the lender, telling you the amount you’ve been approved for, along with a DOL release forms. It’s important to sign and return the documents as this starts the closing process.
- Your commitment letter may be less than you requested, or it may be more than you want. For instance, you may have asked for $200,000 but only been approved for a $100,000 loan. Or you may have been approved for a $100,000 loan, but you only need $50,000 right now. You can accept up to the approved $100,000 loan amount.
- The small business owner needs to get a tax status letter. This has been a challenge for a lot of people, because some are getting letters saying they owe taxes. It’s important to note that at the beginning of the program, it was required the applicant completely pay off the taxes. Now it may be that they just need to show proof of a payment plan or have made 3 consecutive payments.
- There will be a site visit conducted by a third party to verify the business operations.
- A Confirmation of Good Standing Letter is needed from the Department of Labor
- Business owners will have to present a Valid Operating License, depending on the type of business (i.e. a restaurant or daycare).
- A Certificate of Legal Existence is also required. Business owners can request this from the CT Secretary of State as soon as they begin the application process. It’s good for 90 days.
Approval to Funding Timeline
The time is takes from approval to funding depends on each case, and usually depends on 2 factors:
- Responsiveness of the applicant
- Whether there any challenges getting the documents needed.
From the lender’s perspective, it takes about 1 week to make a decision on an application.
- Within the first 24 hours they do a quality check – are all the needed documents there?
- Then it’s another 9-10 days to close, however it can take weeks, usually due to the same 2 factors: how quickly applicants respond and getting the necessary documents.
- Some common barriers to closing include:
- Businesses owing taxes
- The Department of Labor not providing verification. This could be because a business isn’t registered with DOL, or because the business owes employment-related taxes.
- Language and/or technical barriers, for instance, having trouble with the all-electronic application process.
- Delay in identifying and submitting currenting licenses or tax status letters
- Delay in signing documents
A closing representative can help with these issues and answer questions the applicant may have.