The ETA searcher's financing journey: from LOI to settlement

Why the timeline feels like a black box

From an accepted heads of agreement to settlement, our own guidance is roughly six to sixteen weeks, depending on the lender and the deal. That is a wide range, and it feels wide because the financing journey is not one process. It is four or five workstreams running at overlapping times: the searcher's own due diligence, the lender's credit assessment, legal documentation, and valuation or security work, all converging on a single settlement date. Once you can see the stages separately, the range stops feeling arbitrary and starts feeling like a schedule.

Stage one: heads of agreement or letter of intent

A target is identified and a heads of agreement or letter of intent is signed with the seller, usually setting exclusivity and a rough timeline rather than locking in final terms. This is the moment the finance side of the deal actually starts.

On our end, this is where the initial deal review happens. We look at the target's numbers at a headline level, your own financial position, and the shape of the deal, and flag anything that would kill it before you spend serious money on due diligence. We also form a first view on which lender tier, bank, challenger, or private credit, is most likely to suit the deal.

What helps at this stage: whatever financials the vendor can provide, even indicative ones, the signed heads of agreement, and a clear picture of your own funds. This stage is usually the fastest in the journey and rarely eats into much of the six-to-sixteen-week window on its own. The quality of information here still sets the pace for everything that follows.

Stage two: due diligence

Financial, commercial, and legal due diligence on the target now runs, largely led by your accountant and solicitor. This is where the process can start to feel chaotic to a first-time searcher, because several parties are working off the same evolving document set at the same time rather than in a neat sequence.

The finance work does not wait for due diligence to finish. As your accountant works through normalisation adjustments to EBITDA, working capital detail, and any lease or PPSR issues, that is the real picture a lender will underwrite against, not the vendor's headline figures. We track that as it develops and refine our read on lender fit alongside it.

What helps at this stage: keeping information requests moving. Due diligence is generally the phase most within the searcher's own control to speed up, because the pace is set by how quickly documents and answers come back, not by a lender's internal process.

Stage three: indicative terms

Once due diligence has produced a real, normalised set of numbers, we approach the two or three lenders most likely to fund the deal for indicative pricing and structure. This is a soft credit read, not a formal application and not yet full underwriting. You can run the same numbers through our business acquisition calculator beforehand to get your own read on borrowing capacity before the lenders come back with theirs.

Indicative terms give you two things: a genuine read on structure and pricing before you commit to the cost and admin of a full submission, and negotiating leverage with the seller, because you can now show up as a funded buyer rather than a hopeful one. It is worth being clear on what indicative terms are not. They are the lender signalling appetite for the deal as they currently understand it, subject to the full underwriting that comes next.

Stage four: formal credit approval

Once the deal, the structure, and the lender are locked in, the full credit submission goes to the lender's credit team. This is the heaviest documentation stage: three to five years of the target's financials, tax returns and BAS statements, the purchase agreement terms, your own financial position, and usually a transition plan covering how you will run the business from day one.

The lender's credit team tests debt service coverage against their policy threshold, assesses whatever security is on offer, and sets conditions for approval. This is usually where a deal actually lives or dies on the numbers, and it is typically where most of the calendar time inside the six-to-sixteen-week window gets used, because it runs through a full credit process rather than a single relationship manager's judgment.

What helps at this stage: responding fast to conditions. Approval subject to unmet conditions is not the same thing as approval, and the gap between the two is where deals lose weeks unnecessarily.

Stage five: settlement

Formal approval is issued subject to conditions precedent: valuations completed, PPSR registrations in place, loan documents signed, insurance arranged, and sometimes a final financial check close to completion. Our role shifts here from assessment to coordination, keeping the lender, your solicitor, your accountant, and the vendor's side moving toward the same settlement date.

Settlement day itself is largely mechanical if the conditions were cleared properly in stage four. Funds are drawn down, security is registered, and the business changes hands. Most of the real risk in this stage was already resolved earlier in the process, which is exactly why the earlier stages deserve the attention they do.

What actually moves your deal within the six-to-sixteen-week range

Four things do most of the work in determining where your deal lands inside that range.

• Lender tier. Private credit and non-bank lenders generally move faster. Bank-led deals, particularly ones involving property security and formal valuations, typically run longer.
• Quality of financials at due diligence. Clean, well-organised numbers get underwritten faster than numbers that need repeated clarification.
• Whether property security is involved. Valuations and additional security work add real calendar time that a cash-flow-only structure does not carry.
• How fast you respond. Information requests and approval conditions sit with you and your advisers as often as they sit with the lender. Slow turnaround on your end shows up directly in the total timeline.

We give a more specific timing read once indicative terms are in hand, because by then the lender, the structure, and the security position are all known rather than estimated.

Where this fits with the rest of the deal

This is the process view, and running it is where FGO comes in. As your broker, we manage each stage on your behalf and represent you to lenders across the Big 4, challenger banks and private credit whose appetite fits your deal, so several are weighing your case at once rather than you working through one lender alone. For the funding side of an ETA deal, meaning the capital stack, searcher archetypes, and how much you can borrow, see our guide to ETA finance in Australia. For the broader mechanics that apply to any business buyer, not just searchers, see our pillar guide on acquisition finance, or the step-by-step primer on how to finance a business acquisition in Australia.

This article is general information and does not constitute financial or legal guidance. Every acquisition timeline depends on the specific deal, lender, and parties involved. Speak to your solicitor and accountant alongside any finance conversation.