To apply for an SBA 7(a) loan, you’ll want to work with an SBA lending partner, like a bank or credit union, or with a loan broker that specializes in processing SBA loan applications. Lenders and brokers will submit your application and all necessary documentation to the SBA to receive a loan guarantee; this way, if you default on the loan, the SBA will repay the lender the guaranteed amount (typically 75-85% depending on the loan amount).
If you think your business might qualify for an SBA 7(a) loan, you can complete the application process by following these three easy steps:
1. First find an SBA 7(a) lender
Many financial institutions offer SBA 7(a) loans, including national banks and credit unions. You can start by contacting your local bank to see if they offer SBA 7(a) loans. The SBA also has a lender match tool available through its website that can connect you with a lender in your area.
You’ll want to find an SBA lenders or broker that has experience processing 7(a) loans, as they will be able to expedite the application process and answer any questions you may have.
2. Gather your documents and submit your application
An SBA lender or broker will be able to provide you with a list of the necessary documents to prepare and submit your completed SBA loan application. While the requirements may vary based on the lender and the type of SBA 7(a) loan, here is some of the more common types of documents you may need to provide:
- Business financial statements (i.e. balance sheets, profit and loss statements, projected financial statements)
- Income tax returns – personal and business.
- Personal background and financial statement (SBA Forms 912 and 413).
- SBA Form 1919, Borrower Information Form.
- Loan application history.
- Business certificate or license.
- Business overview and history.
- Business lease.
3. Receive an approval
Once you have submitted your application, you’ll need to wait for approval. In some instances, SBA Preferred Lenders can approve loans without the SBA reviewing the application making the timeline quicker.
Once your loan is approved, the lender will begin the closing process. They will need to prepare the loan documents, secure collateral, and fulfilling any other authorization requirements.
After the contracts have been signed, the lender will release the funds and you will begin to repay the loan in monthly payments over the course of the term. The application and funding process usually takes 6-12 weeks though turnaround time varies.