How to Get an SBA Loan

how to get an sba loan

Are you looking to start or grow your business but need financing? SBA loans might be a great option for you. An SBA loan is government-backed and can help any qualified business owner get the funding they need. This article about how to get an SBA loan discusses what you need to know about getting this ever-important loan for your organization. Let’s first get started with a comprehensive guide that walks you through the SBA loan journey from application to approval.

Navigating the SBA Loan Journey: From Application to Approval

SBA loans offer small business owners a government-backed avenue for securing financing. To embark on this journey successfully, follow these steps:

  • Understanding SBA Loans
    • SBA loans are designed to support small businesses, aiding in their establishment, growth, and expansion.
    • The SBA doesn’t directly lend money; instead, it guarantees loans to reduce lender risk.
    • SBA loans cover diverse purposes, from start-up costs to real estate investments.
  • Eligibility for Starting a Business
    • SBA loans cater to startups, working capital needs, and other business requirements.
    • SBA provides various financing programs catering to different business needs.
    • Qualification requires a strong credit history, a viable business plan, and adherence to program-specific criteria.
  • Deciphering SBA Loan Qualification Factors
    • The SBA evaluates seven factors when considering small business owners for loans:
      • Character of the applicant, including integrity and business experience.
      • Collateral value offered as loan security.
      • Capacity of the applicant to repay, considering resources and management experience.
      • Management team’s ability to run the business successfully.
      • Business’s financial history and repayment ability.
      • Market conditions impacting business’s repayment potential.
      • Viability of the business plan and revenue generation potential.

And these….

  • Essential SBA Loan Requirements
    • Credit History: A strong credit history enhances approval chances.
    • Business Plan: A robust business plan should encompass key aspects.
    • Financial Statements: Balance sheets, income, and cash flow statements are mandatory.
    • Personal Guarantee: Personal liability for repayment is required.
    • Experience: Demonstrated management experience and resources are crucial.
  • Choosing the Right SBA Loan Program
    • Different SBA loan programs cater to distinct business needs.
    • Community Advantage Loans target underserved areas.
    • Express Loans provide swift funding for smaller businesses.
    • Disaster Loans aid businesses affected by natural calamities.
    • SBA 7(a) Loans serve businesses with strong financials.
  • Identifying the Ideal SBA Lender
    • Locate SBA-approved lenders, which might not include all banks.
    • Research lender qualifications and application procedures.
    • Begin with local banks or credit unions for SBA expertise.
  • The SBA Loan Application Process
    • Ensure eligibility and understand prerequisites.
    • Identify participating lenders, focusing on local institutions.
    • Prepare necessary financial documents in advance.
    • Submit the application to the lender for assessment.
    • Patience is essential as approval timelines can vary.
  • Waiting for Loan Approval
    • SBA Express loans promise a 36-hour turnaround time.
    • Standard SBA loans can take up to 90 days or more.
    • Express loan approval doesn’t imply immediate funding.

How to Get an SBA Loan

How Do You Apply for Getting an SBA Loan?

If you’re looking to get small business financing through the SBA, here are the basic steps to applying:

  • Check your eligibility: Before you begin the application process, make sure you understand the requirements and qualifications for an SBA loan.
  • Find the right lender: Not all banks offer SBA-backed loans, so you’ll need to find a participating lender. The best place to start is with local banks or credit unions.
  • Gather your documents: The SBA loan application process is paperwork-intensive, so you’ll need to get your financial documents in order before you begin.
  • Submit your application: Once you’ve gathered all the required information, you can submit your application to the lender for approval.
  • Wait for approval: The SBA loan approval process can take a couple of months at least, so be patient while you wait to hear back from the lender.
Steps to Apply for an SBA LoanDescription
Check EligibilityUnderstand loan requirements and qualifications before proceeding.
Find the Right LenderLocate SBA-approved lenders, with local banks and credit unions being recommended starting points.
Gather DocumentsOrganize essential financial documents before initiating the application process.
Submit ApplicationProvide all necessary information to the lender for assessment and approval.
Wait for ApprovalExercise patience as the SBA loan approval process may span several months.

What Are SBA Loans?

To get an SBA loan, it’s best to know what they are. SBA loans are an important resource for small businesses. Small Business Administration loans are provided to help small businesses get started, grow, and expand.

However, the SBA doesn’t lend money to small businesses directly. Instead, the SBA guarantees loans, which reduces the risks for lenders. SBA loans can be used for a variety of purposes, including start-up costs, working capital, equipment purchases, and real estate investments.

Can You Get an SBA Loan to Start a Business?

Yes, you can get SBA loans to start a business, for working capital, and for other business purposes. The SBA offers a number of different business financing programs tailored to fit the needs of small businesses. To be eligible for SBA loans, you must be a small business owner with a strong credit history and a viable business plan.

How Do Small Business Owners Qualify for SBA Business Loans?

According to the SBA, there are seven factors that they take into account when considering small business owners for SBA loans. They include:

  • The character of the applicant. This is based on their personal and business history. While strong credit history is important, the SBA will also consider factors such as the applicant’s integrity and business experience.
  • Collateral. The SBA will consider the value of the collateral being offered as security for the loan. This can include real estate, equipment, inventory, or other business assets.
  • The capacity of the applicant. The SBA will consider the applicant’s financial resources, management experience, and ability to repay the loan.
  • Management’s ability to run the business. The SBA will consider the management team’s experience, skills, and ability to make the business successful.
  • The financial history of the business. The SBA will review the financial statements of the business to determine its ability to repay the loan.
  • Conditions of the market. The SBA will consider the current economic conditions and how they may impact the ability of the business to repay the loan.
  • The business plan. The SBA will consider the viability of the business plan and its ability to generate enough revenue to repay the loan.

All of these factors are important considerations for anyone looking to secure an SBA loan. For California finance lender loans specifically, the SBA will also look at the business’s ability to create jobs and support the local economy.

However, meeting all of these requirements does not guarantee that business owners will be approved for a loan. Ultimately, it is up to the discretion of the SBA lending institution to decide whether or not to approve a loan.

How to Get an SBA Loan

What Are the SBA Loan Requirements?

Let’s take a look at some of the SBA requirements for small business loans:

Credit History

You must have a strong credit history. Not everyone will qualify for SBA loans, but those with a strong credit history will have a better chance of getting approved. Additionally, the SBA often requires that applicants have no recent bankruptcies, foreclosures, or tax liens, as these can be indicative of financial irresponsibility.

Business Plan

A solid business plan is essential for any small business owner who wants to get an SBA loan. Your business plan should include an executive summary, business description, market analysis, financial projections, and management team. It’s important that your business plan also outlines your competitive advantage and marketing strategies, demonstrating how your business will succeed in its market.

Financial Statements

You will need to provide financial statements for your business in order to get an SBA loan. This includes balance sheets, income statements, and cash flow statements. These documents should not only reflect your business’s current financial health but also its financial history and projected future performance.

Having a strong financial history will increase your chances of getting approved for a loan. You’ll also need to provide a personal financial statement for most loans offered by the SBA. Lenders use this to assess your personal financial responsibility and to gauge your commitment to the business’s success.

How to Get an SBA Loan

Personal Guarantee

You will be required to personally guarantee the loan, which means that you will be responsible for repaying the loan even if your business is unable to do so. Putting up collateral like your home or another asset can help reduce the risk to the lender and increase your chances of getting approved for a loan. This requirement emphasizes the importance of being fully committed to your business venture and confident in its success.


You must have the financial resources and management experience to make the business successful. The SBA will consider your experience, skills, and ability to repay the loan when deciding whether or not to approve your loan. Having a track record of success in the industry or in managing a business can significantly bolster your application.

How Do You Choose the Best SBA Loan Program?

When looking at SBA loan programs, it is important to understand the different programs that are available. Each loan program offered by the SBA varies. The SBA community advantage loans are designed for businesses located in underserved areas, while the SBA express loans are for smaller businesses that need fast funding.

There are SBA disaster loans for businesses that have been impacted by a natural disaster and SBA 7(a) loans for businesses with strong credit history and financials. For the SBA 7(a) loan program, your average net income must be under $5 million to qualify.

Finding the Right SBA Lender

When looking for an SBA-approved lender, it’s important to know that not all banks offer these services. You can find a list of participating lenders on the SBA website, and each will have its own set of qualifications and application process.

It’s best to start your search by looking at local banks or credit unions, as they are likely to have the most experience with the SBA program.

How to Get an SBA Loan

How Long Does It Take to Get an SBA Loan?

The SBA promises a 36-hour turnaround time for their express small business loan, but their other loans can take up to 90 days or longer. However, even with their express loan, it can take the lender another few weeks to actually approve the loan.


The path to securing an SBA loan is laden with vital steps and considerations. Small business owners seeking financial support must meticulously navigate eligibility, document preparation, and application submission. Understanding different SBA loan programs, selecting the right lender, and embracing patience during the approval process is pivotal. Ultimately, the journey culminates in acquiring funds that can catalyze business growth and expansion.

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Kevin Ocasio Kevin Ocasio is a staff writer for Small Business Trends. He holds certifications in SEO, digital marketing, and content marketing. Kevin is also certified in Information Technology Technical Support Fundamentals.

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