Money at the table

The short version

• You will need to bring cash to closing: your down payment and your share of closing costs.
• A settlement statement shows every dollar: where it comes from and where it goes.
• Review it with your CPA and attorney several days before closing.
• Your cash must be in place and documented. Lenders check where it came from.
• Confirm wiring instructions by phone. Wire fraud targets closings.

What you bring

• Your down payment, often called the equity injection. At least 10 percent of the total cost of the purchase with an SBA loan, including closing costs.
• Closing costs: lender fees, the SBA guarantee fee, attorney and accountant fees, valuation and appraisal costs and other third-party costs.
• Adjustments, such as prorated rent, prepaid expenses or a working capital adjustment.
• Working capital, if it is not financed.

The settlement statement

The settlement statement, sometimes called a funds flow, lists:

• The purchase price.
• Your cash, the loan amount and any seller note.
• What is paid to the seller at closing.
• What pays off the seller's debts.
• Fees and costs, and who pays each.
• Any money held back in escrow.

Every line should match the purchase agreement and the loan documents.

Your cash must be ready

Your lender will want to see where your down payment comes from and that it is in your account before closing. Do not move large amounts at the last minute without telling them. Gifts and retirement funds have their own documentation. Lesson 3.7 covers this.

Wire safety

Criminals target business closings with fake wiring instructions sent by email. Before sending any money:

• Confirm the instructions by phone, using a number you already know, not one from the email.
• Be suspicious of any last-minute change to the instructions.
• Confirm receipt after you send.

Keep a cushion

After closing, you still need cash for payroll, supplies and surprises. Lesson 3.6 covers why.