What kind of business are you?
Let's Get Started:
How to Apply for an SBA Loan
Written By: Misha M., CFA

When it comes to financing options for your small business, choosing an SBA loan can be an attractive option for many reasons.

With competitive rates, flexible terms, and more lenient requirements, SBA loans are some of the most utilized small business financing options on the market.

That said, applying for an SBA loan isn’t as straightforward as you may think, and there are several steps involved. 

If you’re ready to get funding for your small business, here’s how to apply for SBA loans.

Benefits of SBA Loans

Small businesses have a myriad of options when it comes to obtaining funding for their business needs. SBA loans provide many benefits compared to conventional small business loan offerings, including:

  • More affordable interest rates
  • A more lenient approval process
  • Lager maximum loan amounts
  • Some offer faster funding options
  • Additional financing assistance through resource centers

How to Apply for an SBA Loan

Understand the Requirements

Before you get started browsing financing options for your business, you need to understand the requirements and qualifications that come alongside SBA loans.

It’s important to note that qualifications may vary slightly from lender to lender and the type of loan, but the basic requirements for an SBA 7(a) loan include the following:

  • Your business must operate for-profit
  • Your business must operate primarily in the United States
  • Your business must be considered “small” as defined by the SBA
  • You must have reasonable equity in the business
  • Your loan must be used for sound business purposes
  • You must not have an outstanding debt with the US government
  • SBA loans must be a secondary resource for obtaining financing
  • You must demonstrate a need for the loan

Other types of SBA loans may have different requirements and qualifications, so it’s critical to check with the SBA to determine what requirements you’ll need to meet. 

Find a Lender

Finding the right lender is an essential step in applying for an SBA loan. Lenders will help you navigate the process, offering guidance and support along the way. 

Because SBA loans are ultimately funded by lenders, finding the right lender can make all the difference in securing the best rates and most affordable financing for your business.

SBA loans can be complex, and having a qualified lender by your side can make the process less cumbersome and easier to navigate.

Additionally, working with SBA-preferred lenders can offer quicker approval times and greater approval chances when compared to other lenders.

By using a business loan broker like Llama Loan, you can get instant access to top-rated lenders with your best interests in mind.

Choose the Type of Loan That’s Suited to Your Business Needs

SBA loans come in many different variations, depending on your needs.

The most common SBA loans, SBA 7(a) loans, can be used for an assortment of business purposes ranging from equipment purchases to inventory or working capital.

These loans come with a maximum loan amount of $5 million with a maturity of up to 25 years.

SBA Express loans are better suited for businesses that need expedited financing, but they come with a small maximum loan amount and higher fees.

Ultimately, your lender can help you select the loan that’s fit for your business needs.

Gather Business Documents

Once you’ve landed on a lender and you’ve examined which type of loan is best suited for your business, you can start preparing all of the documents required to proceed with your loan.

Your lender can help you determine what documents you’ll need based on the type of loan you choose.

In general, you’ll need the following:

  • Your completed SBA application form
  • Personal and business financial statements
  • Personal and business tax returns
  • A detailed history of your business, including any licenses, ownership personnel, and lease agreements
  • Personal and business balance sheets outlining assets owned

If your loan requires collateral, you may need to have an appraisal of your assets completed, which will be discussed with your lender.

Having your documents ready ahead of time can help to expedite the process and avoid excess communication that can delay your loan.

Submit Your Application

Finally, you can submit your application to your lender, who will then review the application before deciding to advance the loan to a more formal underwriting process.

There are several steps of the application process that will help you reach the finish line.

First, you’ll receive a loan proposal or letter of intent that details the terms of the loan. If you agree to the terms, it will be sent to the SBA for review.

Once the SBA reviews your application, they can approve or deny it – based on your qualifications. If approved, you will receive a commitment letter that outlines the final terms of the loan for you to accept.

How Long Does it Take to Submit an SBA Loan Application?

Once you submit your SBA loan application, it might feel like a waiting game. You can check the status of you application at any time after applying, but it can be challenging to find a precise time frame.

In most cases, your application will take anywhere from 15 to 90 days from start to finish, but there are many circumstances that can cause this timeframe to differ. For example, SBA Express loans feature a turnaround time of fewer than 36 hours once submitted to the SBA for approval, whereas SBA 7(a) loans usually require 5 to 10 business days for the approval process.

Closing Thoughts

SBA loans are an economical and convenient financing option for many small businesses. 

To apply for an SBA loan, you’ll need to know the requirements, find a lender, choose the loan type best for your business, gather your documents, and submit them for consideration. The process can take anywhere from 15 to over 90 days, depending on a multitude of factors. 

If you’re ready to obtain financing for your small business, contact Llama Loan today for access to the best lenders available!

Key Takeaways

llama icon
To apply for an SBA loan, start by understanding the requirements and types of loans available.

llama icon
Then, you can find a lender and gather your business documents before submitting your application. In most cases, it can take

llama icon
In most cases, it can take anywhere from a few weeks to a few months to get approved for your loan.
Ready to get started?
What type of loan do you need?
Ready to get funding?