How to Apply for an SBA Business Loan

If you’re a small business owner, getting a business loan can be challenging to say the least. Luckily, the Small Business Administration (SBA) can assist when credit terms...

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Before applying for an SBA 7a loan, you will need to assemble all, if any, financial history you have, along with a down payment or equity funds (i.e., loans or investments from outside third-parties). Being able to show that you have additional capital lessens the risk associated with lending to you.

Also make sure to clean up any outstanding issues or, at least, have a settlement plan in place for old debts or back taxes. Getting a loan should be for positive debt such as adding headcount, facilities, machinery or other things that will exhibit a return on that investment and lessen the default risk.


SBA Business Loan Timeline

In all, it could take up to two or three months to put a SBA business loan application together, so you will want to plan ahead. The SBA has created a loan checklist that can be a guidepost throughout the process. However, keep the following three things in mind:

  • Business loan application documents (i.e., a profit and loss statement or financial forecasting documents) should be professionally prepared, and may be hard to complete if you are in the early stages of your startup. This is why it can take months – essentially you’re assembling a loan team, along with paperwork.
  • Lenders will want to review historical data, so in addition to setting up the team you may want to have at least one year of business operations in place before filing. You can use that year to assemble paperwork as well.
  • Start building your personal financial history, conduct a personal background check, create a resume, and ensure you have titles or deeds to any business property. You also need to be licensed and permitted to do business in your municipality or state.

Once you get all of your documents together, you should have a strong application for a business loan. The payoff – besides the loan – will be the lower interest rate stemming from the SBA guarantee. You may also be able to pass some of the guaranty fees on to your lender – saving more money.


Bailey McCann is a writer for Funding Gates, the accounts receivable software for small businesses that allows them to track, organize and manage open invoices with simple clicks. Bailey enjoys writing on business, finance and technology. She regularly covers topics of interest to entrepreneurs, investors and fund managers. For additional tips on applying for business loans in general, download the free Sageworks whitepaper, Top Tips for Getting a Business Loan.

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