How To Apply For An SBA Loan And How Long Does It Take?

Small businesses are the major driver of the economy despite the presence of corporate giants. The number of small businesses in the US economy is an astounding 99.9%. It is based on the data provided by the US Small Business Administration (SBA). The US SBA is the government agency responsible for helping small businesses grow.

Many small businesses are emerging and are looking to be a part of and contribute to the economy. However, not every business can afford to start without worrying about its funds. It is where the SBA loan comes in, as it creates a way for them to start operating. It does not mean that anyone can get approval for an SBA loan.

The banks usually provide loans that have the guarantee of SBA, and there are some strict guidelines that every small business should follow before receiving a loan. SBA also provides counsel to these businesses to grow and expand further. Now, let’s look at how a small business can apply for an SBA loan.

Guidelines To Apply For An SBA Loan

If you are a small business looking to get funds to start your business, you can follow some specific standards that the SBA has set. 

The first step is to look for an institution that provides loans since SBA does not offer them directly. Banks are usually the go-to option for this. After you apply for the loan, the lending institutions send it to the SBA for review and provide a guarantee on the loan. It is done to reduce the risk factor for the lender as SBA repays the loan in case of a default in repayment by the business.

The SBA also requires a guarantee from the business to stake more than 20% ownership of the company. This makes the banks more willing to lend, and the SBA can also back it up. After getting the approval for an SBA loan, the institution or the bank provides the loan. They are also responsible for the recollection of the loan. The loan has to be paid back by the business, which is usually monthly.

Benefits Of An SBA Loan

If you are a small business and are thinking of getting a loan for your business, then you should consider SBA loans. There are a lot of reasons that make them the first choice for any small business to grow. 

Interest Rate

This is a big reason for small businesses to opt for SBA loans. The rate of interest they provide is much lower than the standard market rate. It makes a small business much more comfortable in choosing an SBA loan. It is also because finance is an essential part of a small business, especially when they are struggling to grow.  

If your business also needs assistance in growth or recovery, then your best option would be SBA loans.

Flexibility In Payment

The structure of SBA loans is such that they are an easy-to-choose option with the provision of flexibility in payments. However, flexibility can depend on the nature of your business. 

Credit Score

Lending Institutions require businesses to maintain a certain level of credit score. But, it is lower than the requirements that traditional lending institutions ask for. 

It is another factor that makes it easier for small businesses in their initial stages to get a loan. But you still have to meet the eligibility criteria to get approval for the loan. 

Time For Repayment

In the case of a small business, there is usually a time constraint that affects their decision-making and availability for a loan. The reason is that repayment becomes a hindering factor as soon as they start growing or recovering. They need a longer time to settle before being able to repay their loans. 

This is where SBA loans can be very helpful, as they have longer repayment terms. These loans basically give businesses more time to repay, making it easier for them to settle. The period can range from 10 to 25 years, depending on the type of business that requires the loan. 

Eligibility For An SBA Loan

While it is generally easier to get an SBA loan, not just anyone can get one. Specific eligibility criteria need to be fulfilled before applying for the loan. Here’s the list of minimum requirements that a business must fulfill before applying for a loan. 

Credit Scores

Businesses with low credit scores are most likely to be ineligible for an SBA loan. A high personal credit score is also a factor that can make the process easier. So make sure your credit scores are not lacking, as it is undoubtedly a factor affecting the loan process. 

Duration Of Business

Any business that wants to qualify for an SBA loan must have existed for more than two years. If you are looking to get your business started and boost it, then make sure that it is at least two years old.  

There are also many other small factors that can affect the eligibility for a loan. But, they do not affect it as much as the ones mentioned above. So as long as you meet those two requirements, you should be good to go for an SBA loan. 

Also Read:- How To Get SBA Financing? A Guide For Applicants

How Long Does An SBA Loan Take To Approve?

This is a very common question that often gets unanswered. A small business that is planning to borrow might often think about the time taken to get an SBA loan approval. 

Any business eligible for a loan would have to wait for about 1–3 months. There is also another loan that requires lesser time. It is known as SBA Express and can be approved within 36 hours of application. The catch with this is that there is a limit on the amount of finance and the guarantee on it. 

Is There A Limit On The Number Of Loans You Can Get?

If a loan is approved for a business, and it wants to apply for another loan, then it can definitely apply for the second time. As for the question about the limit on the number of loans, the simple answer is NO. There is no limit on the number of loans one can apply for as long as it remains within the eligibility and follows the guidelines.  

Types Of SBA Loans

SBA offers loans in various ranges. Here’s a list of the type of loans that SBA provides and the purpose it provides for.

SBA 7(A) Loans

This type of loan is provided for capital, expansion, and equipment purchase. The limit is up to $5 million. 

SBA Express Loans

As already mentioned, this is a quick-to-get loan. It is most suitable for those who do not want to wait for long for their loan. However, the limit is only up to $500,000.

SBA 504 Loans 

This type of loan is given for the purchase of fixed assets for the long term, such as land or machinery. The limit of this loan is up to $5.5 million. 

SBA Community Advantage Loans

This type is used for the purpose of normal business and has a limit of up to $350,000.

SBA Disaster Loans

As the name suggests, the purpose of this type of loan is the recovery of damages that occur due to a disaster. The catch is that it is applicable only to declared disasters. The limit for this type of loan is up to $2 million. 

SBA Microloans

These are small loans that can amount to up to $50,000 and are used for expenses on working capital. 

The Easiest Way To Get An SBA Loan

There are plenty of options available to choose to get an SBA loan. You can also try Alnicor Consulting to simplify the process of getting small business loans. 

Conventional loans can be bothersome with their procedures and higher rates of interest. This can affect the growth/recovery of your small business. Alnicor Consulting has paved the way for you to get SBA loans with ease. You can let our team of dedicated financial consultants help you with the process and guide you toward the SBA loan that would work best for you.  

If there are any queries/issues related to your business or you are looking for expert guidance. You can contact us at the below-mentioned email or contact no. 


Call Us: +1 833-211-1777 OR +1 833-256-4267

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