How Long Does it Take to Get an SBA Loan?

The SBA loan process.

Applying for an SBA loan can seem overwhelming at first glance, but understanding each step can make the process more manageable. Here are the key stages of the SBA loan process, from initial preparation to final funding, so you can navigate it with confidence. Knowing what to expect and how to prepare will help you streamline your application and improve your chances of securing the loan your business needs.

Getting matched with a lender: 2 days.

The federal government guarantees a portion (up to 75%) of SBA loans. However, the Small Business Administration itself does not issue loans to business owners. Instead, SBA loans come from the same lenders you would seek out for traditional business loans. 

If you’re interested in applying for an SBA loan, the first step you’ll need to complete is getting matched with an SBA lender that’s capable of meeting your needs. You can complete this step online via the U.S. Small Business Administration’s lender match tool. 

The lender match process requires you to complete a brief questionnaire. After you do so, it could take a few days for the system to locate a lender match for your business (though sometimes the process is faster).

Gathering documentation and applying for the loan: Up to 30 days.

The next step in the SBA loan application process is typically the lengthiest and the most difficult for you, the business owner, to complete. SBA loans feature extensive paperwork and documentation requirements. Below is a sample—though certainly not a comprehensive list—of items your lender may want you to include with your SBA loan application. 

• Business licenses
• Detailed list of debts
• Current income statement
• Personal income tax returns (previous three years)
• Business income tax returns (previous three years)
• Business financial statements (profit and loss statements, cash flow projections, etc.)
• Loan application history
• Resumes for principal owners
• Real estate appraisals (collateral)
• Lease agreements (collateral)
• Franchise, asset purchase, real estate purchase, or other purchase agreements (based on loan purpose) 

Depending on the loan purpose and your business’ record-keeping habits, this step might take anywhere from a few days to an entire month. 

Underwriting: As little as 2 weeks up to 3 months.

Once the application is complete and submitted with all required documents, the loan enters the underwriting phase. This is when the lender reviews all the information and documents you provided to determine your eligibility. The underwriting process for an SBA loan can range significantly in duration. Some lenders are able to expedite their review and make a decision within as little as two weeks. However, for more complex applications or during times of high demand, this process can extend up to three months.

During underwriting, the lender assesses the risk of lending to your business, which includes evaluating your financial statements, credit history, business plan, and the collateral you’ve offered. To improve your chances of a favorable outcome and possibly expedite this process, ensure all documentation is accurate, comprehensive, and well-organized.

Waiting for a loan decision: 1-3 weeks.

Once you submit your loan application, it can take several weeks for a lender to review your documents and underwrite your loan. During the application review and underwriting process, the lender will analyze your creditworthiness (aka your likelihood to repay debts) and your capacity to repay (aka whether you can afford additional debt). 

Other details a lender may evaluate include:

• Value of collateral provided
• Business revenue
• Credit history (personal and business)
• Credit scores (personal and business) 
• Personal and business debts

If your application passes through the underwriting process and a lender approves your application, the next step will be to schedule a loan closing date. 

Receiving your loan proceeds: 1-2 weeks (sometimes up to 90 days).

Once a lender approves your application for an SBA loan, it will put together some paperwork to finalize your loan agreement. This process also takes time. (Note: For commercial real estate transactions, you might also have to hire an attorney to facilitate appraisals and title work, and process other legal documents that could add more complexity and time to this process.)

It’s common for an SBA lender to need several weeks to prepare the paperwork you will need to review and sign before you can receive your loan proceeds. That time frame can easily be doubled, tripled, or more with commercial real estate transactions. And some banks warn that the loan closing process for SBA loans could take up to three months.

How long each loan type takes.

Every SBA loan type has its own unique timeline, shaped by varying application requirements and review processes. Understanding these differences can help you better plan for the future and set realistic expectations for the funding your business needs. Here’s a brief overview of how long you might expect to wait for some of the most common SBA loan types.

SBA 7(a) loans: 60-90 days.

The SBA’s most common loan program is the SBA 7(a) loan. This general purpose loan can provide borrowers with up to $5 million in funding. Eligible business owners can use SBA 7(a) loan proceeds for a variety of business expenses, including the purchase of commercial real estate, working capital, business supplies, furniture, and fixtures, and to refinance existing business debt. 

SBA 7(a) loans are popular due to their versatility and the substantial loan amounts they offer. However, these loans also tend to take the longest of all SBA loan types. From start to finish, it’s common for an SBA 7(a) loan application and funding process to last between 60 and 90 days.

Additionally, SBA 7(a) loan terms are generally favourable, with repayment periods of up to 25 years for real estate and up to 10 years for other uses such as working capital or equipment purchases. This long-term financing can help businesses manage their monthly payments more effectively. Furthermore, these loans often come with lower interest rates compared to traditional business loans, making them an attractive option for small business owners seeking affordable financing solutions.

SBA Express loans: 30-60 days.

Another popular Small Business Administration loan program is the SBA Express loan. With the SBA Express Program, qualified borrowers can receive up to $500,000 worth of funding for their businesses. And for loans of $50,000 and under, lenders do not have to require collateral from borrowers. 

After you complete your application for an SBA Express Loan, you can expect to receive a response from the Small Business Administration within 36 hours. However, the lender makes the final eligibility decision. From application to funding, the entire SBA Express Loan process could potentially take as little as 30 days. 

It is important to note that the federal government guarantees only up to 50% of SBA Express loans. By comparison, the SBA 7(a) loan features a 75% guarantee that lenders can rely on in the event of a default. As a result, SBA Express loans are riskier for SBA lenders to issue. So, they might not be as easy to qualify for, depending on the details of your loan application.

SBA 504 loan: 60-90 days.

SBA 504 loans can be a helpful financing option for small business owners who need affordable financing options for certain types of commercial real estate purchases, machinery, or equipment. Eligible borrowers may receive up to $5 million in funding. For certain energy projects, the maximum loan amount may extend to $5.5 million.  

504 loans are backed (in part) by the SBA and made available through Certified Development Companies, also called CDCs. These are nonprofit corporations that aim to promote economic development in local communities. Around 50% of the total project is typically financed through a private business lender as well, along with at least a 10% down payment from the business owner (sometimes up to 20% down). The SBA-backed portion of the loan comes in the form of a second mortgage for up to 40% of the eligible project costs.  

You can start the application process for a CDC/504 Loan by searching for a local CDC on the SBA’s website. In general, SBA 504 loans can take several months to process. Most borrowers will wait at least two to three months from the time they submit their initial loan application before they receive their loan proceeds (assuming all goes well and they qualify for funding).

Note that you cannot use a 504 loan for working capital, inventory, consolidating or refinancing debt, or investing in rental properties. However, these SBA loans may work well for purchase of real estate assets or equipment that can promote job creation or business growth. Companies that will use funding to improve or modernize existing facilities, land, streets, landscaping, etc., may also be eligible for this SBA loan program.

SBA microloan: 30-90 days.

Small business owners can use the SBA microloan program to borrow up to $50,000 to cover eligible business expenses. The average size of an SBA microloan is $13,000. Even though most microloans feature smaller loan amounts, the intermediary lenders that issue the loans (typically nonprofit community-based organizations) may require collateral, plus a personal guarantee from the business owner. 

Although lenders issue microloans for smaller amounts, the loan process can still be slow. If your small business qualifies for funding, it’s common for it to take between 30 and 90 days between the initial loan application and the receipt of your loan proceeds. Remember, both the SBA and an intermediary lender will have to approve your loan application.

Eligible microloan borrowers can use the funding they receive to support their small business in a variety of ways including to purchase inventory, equipment, supplies, machinery, furniture, and to provide essential working capital. However, business owners cannot use SBA microloan funds to purchase real estate or consolidate existing debts.

Factors that affect SBA loan processing times.

Several factors can impact the processing time of SBA loans, making some applications move faster or slower through the pipeline. Understanding these factors can help applicants set realistic expectations and better prepare for the application process. Key elements that affect SBA loan processing times include:

• Business readiness: The more prepared a business is with its financial statements, business plans, and required documentation, the faster the application process can proceed. Incomplete applications or missing documents can significantly delay the process.
• Lender experience: Working with a lender that has extensive experience with SBA loans can also affect processing time. SBA Preferred Lenders, for example, have the authority to process, underwrite, and finalize most SBA loans without direct SBA review, which can speed up the approval and funding process.
• Loan complexity: Larger loan amounts, or loans used for more complex projects (such as purchasing real estate or starting new construction), may require additional documentation and verification, extending the processing time.
• Time of year: Application volume can vary throughout the year, impacting processing times. Periods of high demand can slow down the process, as lenders and the SBA manage a larger queue of applications.
• Accuracy of information: Inaccuracies in the application or documentation can lead to delays as these issues are identified and corrected. Thoroughly reviewing all information before submission can prevent unnecessary setbacks.
• Economic and policy environment: External factors, such as changes in government policy or economic conditions, can influence processing times. For example, during economic downturns or following natural disasters, the volume of applications may increase, slowing down the process for all applicants.

By being aware of these factors, applicants can take proactive steps to mitigate potential delays, such as choosing an experienced lender, ensuring their documentation is complete and accurate, and applying during lower-demand periods when possible.

How to speed up SBA loan processing times.

While the SBA loan process can be lengthy, there are several strategies you can employ to help expedite your application:

1. Get prequalified: Before you formally apply, some lenders offer a prequalification process that can give you an idea of your eligibility and the potential loan terms. This can help you identify and resolve issues that might slow down the full application process.
2. Organize your documents: Ensuring that all your financial documents, business plans, and personal credit histories are in order before you apply can save valuable time. Missing paperwork or unclear details can cause delays, so it’s vital to prepare everything meticulously.
3. Work with SBA Preferred Lenders: Choosing to work with SBA Preferred Lenders can significantly speed up your loan processing time. These lenders have demonstrated their proficiency in processing SBA loans and have earned the authority to underwrite and finalize most SBA loans without needing to direct SBA review. This streamlined process can reduce delays and help you receive your funds faster.
4. Clear communication: Maintain open lines of communication with your lender. Promptly respond to any requests for additional information or clarification to avoid bottlenecks.
5. Hire a professional: Sometimes, hiring a loan consultant who specializes in SBA loans can be worth the investment. They can help you navigate the application process smoothly and identify and address potential issues before they become obstacles.
6. Consider smaller loan amounts: If possible, apply for only the amount you need. Smaller loans often require less documentation and can be approved more quickly than larger, more complex loans.

By following these tips, you can enhance your chances of a swift and smooth SBA loan approval process, helping you secure the funding your business needs with as little delay as possible.

SBA loans vs. other small business loan types.

When deciding on the best financing option for your small business, it’s vital to compare SBA loans with other available loan types. This evaluation can help you determine which loan will best meet the needs of your business, considering factors like interest rates, repayment terms, and application complexity.

Traditional business loans.

Traditional business loans, offered by banks and credit unions, are a common choice for many business owners. These loans typically provide funding quickly once approved, often within a few weeks. However, the requirements for obtaining a traditional business loan can be stringent. Lenders usually look for strong credit scores, a solid business history, and substantial collateral. Interest rates can be higher compared to SBA loans, especially for businesses deemed risky.

Merchant cash advances.

Merchant cash advances (MCAs) provide small businesses with an advance on their future credit card sales. They are typically easier to qualify for than SBA loans, making them an appealing option for businesses with less than stellar credit. However, MCAs come with higher costs, including elevated interest rates and fees, which can make them more expensive in the long run. Repayment is usually tied to daily credit card transactions, potentially straining cash flow.

Business lines of credit.

A business line of credit operates much like a credit card, offering flexible access to funds up to a certain limit. Once established, you can draw from the line of credit as needed and repay it over time. This type of financing is ideal for managing cash flow or handling unexpected expenses. While the application process for a business line of credit can be quicker than for an SBA loan, interest rates may be higher, and the repayment terms could be less favorable.

Equipment financing

Equipment financing is specifically designed for purchasing machinery or other business-related equipment. The equipment itself often serves as collateral, making it easier to qualify for this type of loan. Interest rates and terms can be more favorable compared to other forms of financing. However, this type of loan can only be used to purchase equipment, limiting its flexibility compared to an SBA loan.

Invoice factoring

Invoice factoring, or financing, allows businesses to sell their unpaid invoices at a discount in exchange for immediate cash. This type of financing can be quick and relatively easy to obtain, making it a good option for businesses that need to improve cash flow quickly. The downside is that it typically comes with higher fees and interest rates, and relying too heavily on this type of financing can become expensive over time.

In summary, while SBA loans often come with lower interest rates and favorable terms, the application process can be lengthy and complex. In contrast, other small business loan types may offer quicker access to funds or be easier to qualify for, though they often come with higher costs or more rigid usage restrictions. Evaluating your specific business needs and financial situation carefully will help you choose the most suitable loan option for your circumstances.

The bottom line.

The U.S. Small Business Administration provides many attractive financing options to support small business owners throughout the country. And when it comes to the cost of the loan and loan terms, SBA loans tend to be generous in both areas.

With a proprietary application platform that makes uploading documents fast and easy and a dedicated SBA team on call to answer any questions you have and assist you throughout the funding process, we’ve made it as easy as possible for business owners to access an SBA loan. Learn more about applying for an SBA loan.