What you need to do to get an SBA loan

An SBA loan starts with a bank or credit union, not the Small Business Administration itself. The SBA doesn't lend money directly — it guarantees loans that private lenders make to small business owners. You pick a lender, complete their process, and if you're approved, the SBA backs part of the loan so the lender takes less risk.

The process typically takes 4 to 6 weeks from process to funding, though it can be faster or slower depending on how quickly you gather documents and how busy the lender is. You'll need to prove your business exists, show your personal credit history, and demonstrate that you have a real plan for how you'll use the money and pay it back.

Key Takeaways

  • You explore through a bank, credit union, or online lender that participates in SBA programs, not directly through the SBA.
  • The SBA guarantees a percentage of the loan (usually 50 to 90 percent), which means the lender shoulders less risk and may offer better terms than a conventional loan.
  • You'll need to provide personal tax returns, business financial statements, a business plan, and proof of what you'll use the money for.
  • The most common SBA loan for small businesses is the 7(a) loan program, which can fund up to $5 million and covers equipment, inventory, working capital, and real estate.

Find a lender that offers SBA loans

Not every bank offers SBA loans, so your first step is to find one that does. The SBA maintains a searchable directory of lenders on its website at sba.gov — you can filter by state and loan type. Most large banks participate, as do many regional banks and credit unions. Online lenders and community development financial institutions (CDFIs) also offer SBA loans, though terms and speed vary.

Call or visit the lender's website and ask which SBA programs they offer. The 7(a) loan is the most common and works for most small business needs. The Microloan program (up to $50,000) exists for very small businesses or startups. The CDC/504 loan is designed for real estate and equipment purchases. Different lenders specialize in different programs, so if one says they don't offer what you need, try another.

Before you commit to a lender, ask about their timeline, what documents they require, and whether they have a relationship manager who will walk you through the process. A lender who answers questions clearly and doesn't rush you is worth the extra phone call.

Gather your financial documents

The lender will ask for documents that prove your business is real and that you can repay the loan. Have these ready before you explore: your personal tax returns for the past two years, your business tax returns for the past two years (if your business has been operating that long), and current business financial statements (profit and loss statement and balance sheet). If your business is brand new, you may only need a personal tax return and a projection of what you expect to earn.

You'll also need a business plan that explains what your business does, who your customers are, and how you'll use the loan money. This doesn't need to be a 50-page document — a few pages describing your business, your market, and your plan to repay the loan is usually enough. The lender wants to see that you've thought through how the money will generate revenue or reduce costs.

Bring proof of your business ownership or structure: articles of incorporation, a partnership agreement, or a sole proprietorship registration if your state requires one. You'll also need your business license and any professional licenses if your industry requires them. Have your personal identification ready, and be prepared to list all your business debts and personal debts.

Complete the SBA loan process

The lender will give you their process form, which asks for details about your business, your personal background, how much you want to borrow, and what you'll use the money for. Be honest and specific. "Working capital" is vague; "to purchase inventory for the 2025 season" is clear. The lender uses this information to decide whether the loan makes sense and to set the terms.

You'll also complete the SBA's Form 1919 (Statement of Personal History) and Form 1920 (Statement of Personal History for Loans Under $350,000), which ask about your background, criminal history, and whether you've defaulted on any loans. These forms are straightforward — answer truthfully and completely. Leaving something out or lying on these forms can disqualify you or lead to loan cancellation later.

The lender may ask for a personal may provide, which means you're personally responsible for repaying the loan if your business can't. This is standard for SBA loans. Some lenders also require collateral — equipment, real estate, or inventory that they can seize if you default. Ask what collateral they need before you sign anything.

Wait for underwriting and approval

After you submit your process, the lender's underwriting team reviews your documents to make sure everything is complete and accurate. They'll verify your income, check your credit report, and confirm that your business is legitimate. This step usually takes 2 to 3 weeks. If they find gaps or inconsistencies, they'll ask you for more information or clarification.

Once underwriting is complete, the lender sends your file to the SBA for review. The SBA checks that the loan meets its requirements and that the lender followed the rules. This step typically takes 1 to 2 weeks. If the SBA approves it, you'll get a conditional commitment letter that outlines the loan terms, interest rate, and repayment schedule.

Read the commitment letter carefully. Make sure the loan amount, interest rate, and term match what you discussed with the lender. If something doesn't look right, ask the lender to explain it before you sign. Once you sign, you're committing to those terms.

Close the loan and receive funding

After you sign the commitment letter, the lender schedules a closing meeting. You'll sign the promissory note (the document that says you owe the money), the security agreement (if there's collateral), and any other closing documents. Bring a photo ID and be prepared to sign multiple copies. Some lenders do closings in person; others do them electronically.

At closing, you'll also pay closing costs, which typically range from 1 to 3 percent of the loan amount. These cover the lender's legal fees, appraisal costs, and SBA may provide fees. Ask the lender upfront what closing costs will be so there are no surprises. Some lenders allow you to roll closing costs into the loan amount rather than paying them out of pocket.

After closing, the lender funds the loan — usually within a few business days. The money goes directly to you or to a third party (like a vendor or real estate seller) depending on what the loan is for. Once you have the funds, you can use them for the purpose stated in your process. Using the money for something else can violate the loan agreement.

What to do if you're denied

If the lender denies your process, ask them why. Common reasons include insufficient credit history, too much existing debt, a business plan that doesn't look viable, or insufficient collateral. Some of these you can fix — paying down debt, improving your credit score, or revising your business plan — and then reapplying with a different lender.

If you were denied because your business is too new or your credit is too weak for a 7(a) loan, ask the lender whether you may have access to for a Microloan or whether a CDFI in your area might have different lending standards. Some lenders also offer pre-approval coaching, where they tell you exactly what you need to do to strengthen your process before you reapply.

You can also contact your local Small Business Development Center (SBDC) or SCORE chapter — both offer free business counseling and can help you understand why you were denied and what to do next. These organizations sometimes know lenders who work with borrowers in your situation.

Frequently Asked Questions

How much can I borrow with an SBA loan?

The 7(a) loan program, the most common SBA loan, allows you to borrow up to $5 million. Microloans cap at $50,000. The actual amount you can borrow depends on your business's cash flow, how much collateral you have, and how much the lender thinks you can repay. Most first-time borrowers get $50,000 to $250,000.

What's the interest rate on an SBA loan?

Interest rates vary by lender and market conditions. The SBA sets a maximum rate, which is usually the prime rate plus 2.25 to 2.75 percent for 7(a) loans. Your personal credit score, the loan amount, and the repayment term all affect the rate you're offered. Ask multiple lenders for rate quotes before you decide.

Do I need collateral to get an SBA loan?

Most SBA loans require collateral, but the SBA allows lenders to waive it for loans under $25,000 or in certain circumstances. If you have equipment, real estate, or inventory, the lender will likely ask you to pledge it as security. Ask the lender upfront what collateral they need.

Can I get an SBA loan if I have bad credit?

Most lenders want a credit score of at least 650 to 680, but some work with lower scores if you have strong business fundamentals or collateral. If your credit is weak, a CDFI or Microloan lender may be more flexible. Paying down existing debt before you explore can also improve your chances.

How long does it take to get an SBA loan?

From process to funding typically takes 4 to 6 weeks. Online lenders may be faster (2 to 3 weeks), while traditional banks may take longer (6 to 8 weeks). The timeline depends on how quickly you provide documents, how busy the lender is, and whether the SBA needs to ask for more information during review.