Today’s interest rates for all SBA loans
Check Today's Rates →
What Is the SBA 7(a) Loan Approval Time?
An SBA 7(a) loan can take time to move through approval — typically, 60-90 days. In addition, if your lender is an SBA Preferred lender, they will have the authority to approve your loan much faster than a non-preferred lender.
Start Your Application and Unlock the Power of Choice$5.6M offered by a Bank$1.2M offered by a Bank$2M offered by an Agency$1.4M offered by a Credit UnionClick Here to Get Quotes!An SBA 7(a) loan can take time to move through approval — typically, 60-90 days. In addition, if your lender is an SBA Preferred lender, they will have the authority to approve your loan much faster than a non-preferred lender. Much of the process depends on the individual lender, and working with a lender that has handled SBA loans before is a good idea if time is a concern. From start to finish, getting an SBA 7(a) loan can take weeks -- you must prepare your documents, meet with the bank, prepare more documents, wait for underwriting, and then wait for closing.
If you show up to your lender with all of your documents in order, the process can go much faster. Here’s a list of some of the common documentation you should have ready when you visit your lender:
Bank account statements
IRA, 401(k), and other retirement account statements
Life insurance statements showing current cash value
Investment documents showing current value
Pay stub
Statements for other income (like pensions)
Loan statements (such as mortgages, credit cards, and auto loans)
How long does it take to get approved for an SBA 7(a) loan?
The length of time it takes to get approved for an SBA 7(a) loan depends on the type of loan processing used. Standard 7(a) loan processing takes between 7-10 business days, while Certified Lenders Program (CLP) processing takes only 3 business days.
Source: www.sba7a.loans/sba-7a-loans-small-business-blog/how-long-does-it-take-to-approve-an-sba-7a-loan
What are the requirements for an SBA 7(a) loan?
The SBA 7(a) loan has the following requirements:
- Your business must operate for profit. Nonprofits and not-for-profit businesses are not eligible.
- You must also have some equity in the business — this could mean you already have a profitable business, or you could use your own personal equity as collateral.
- If you have any alternative financial resources, you must have used them first. For example, if you have a personal savings account or are able to get a personal loan, then you must first pursue those options before applying for an SBA 7(a) loan.
- The business owner cannot be on parole.
- You must be doing business in the U.S. or its territories.
- A maximum loan amount of $5 million with no minimum loan amount (most loans, however, are $30,000 or more).
- The business must meet the SBA's size standards for its particular industry.
- The business must have fewer than 500 employees and less than $7.5 million in revenue each year for the previous three years.
- The business must physically be based in the U.S. and operate within the U.S. and its territories.
- Business owners must first have used other sources of financing, including personal funds, in order to qualify.
- Businesses must not be involved in lending, real estate, or speculation.
What are the benefits of an SBA 7(a) loan?
The SBA 7(a) loan program offers several benefits to small businesses, including:
- Flexibility in underwriting
- Often has lower interest rates than other comparable financing options
- Long loan terms, up to 25 years for real estate, 10 years for equipment, and 10 years for working capital or inventory
- Flexible collateral requirements
- Lenders are prohibited from charging certain fees, including:
- Insurance service fees
- Add-on interest charges
- Legal service fees (with some exceptions)
- Broker referral fees
In addition, SBA 7(a) loans can be used for various business purposes, including renovations, capital purchase, seasonal lines of credit, or refinancing of existing debt. There is no prepayment penalty for loans that mature within 15 years, and no balloon payment.
What are the risks of an SBA 7(a) loan?
The risks of an SBA 7(a) loan include lengthy approval times (for standard SBA 7(a) loans), lots of documentation, collateral is often required, certain businesses, including real estate investing, lending, gambling, and speculation are prohibited, high credit scores are typically required (typically 680+), and may be restrictions on supplemental/additional financing.
What are the different types of SBA 7(a) loans?
The SBA 7(a) loan program offers several types of loans for small business owners. The most common type is the SBA 7(a) Standard Loan, which is offered through banks and other traditional lending institutions. The SBA guarantees the funds up to 85% in some cases. The funds from the 7(a) can be used for nearly any legitimate business purpose, such as purchasing equipment, land and real estate, or for working capital. The maximum loan amount for the SBA 7(a) is $5 million, and there is no minimum.
Other types of SBA 7(a) loans include the SBA Express Loan, the SBA Export Express Loan, the SBA CAPLines Loan, the SBA International Trade Loan, the SBA Military Reservist Economic Injury Disaster Loan (MREIDL), the SBA Community Advantage Loan, and the SBA Microloan. For more information on each of these loan types, please visit https://www.sba7a.loans/sba-7a-loans-small-business-blog/what-are-the-sba-7a-loan-programs.
For more information about the specific paperwork you need to bring with you to your lender, as well as the SBA specific documents you and your lender are required to complete, head over to our page on all of the SBA paperwork.
SBA Express Loan Program
Fast turnaround times is what the SBA Express Loan program is all about. Because the loan has a very quick processing time, however, the maximum loan amount is lower than the 7(a) Standard loan. Within 36 hours, you can have an SBA Express loan for up to $500,000.
To learn more about the SBA 7(a) loan program or to get a free quote, simply click the button below!