SBA loan application process

Loans from the U.S. Small Business Administration (SBA) are extremely popular for small businesses that need financing.

The SBA loan application process can be complex, but knowing what steps to take and how to apply can make it easier. Read on to find out the application process for an SBA loan, including which documents and other information you’ll need.

Kat Cox

Page written by Kat Cox. Last reviewed on August 12, 2024. Next review due October 1, 2025.

What is an SBA loan?

The U.S. Small Business Administration (SBA) offers a number of loan programs for small businesses to help them accomplish many financial goals, such as funding new equipment purchases, gaining working capital to cover operational costs or creating jobs in the community. All SBA loans are guaranteed by the U.S. federal government and administered by approved SBA financial partners, including banks and credit unions, Certified Development Companies (CDCs) or community-based financial partners. 

SBA loans can range in amount from under $50,000 to several million dollars, depending on the program and the purpose of the loan. SBA loans tend to have longer repayment terms and lower interest rates than other conventional loans, which makes them very popular among small businesses. However, it also makes them very competitive. In order to improve your chances of securing an SBA loan, it’s important to understand the qualifications and application process before you get started.

Is the SBA loan application process different from a typical loan?

The SBA loan application process is somewhat different from other loan application processes. The biggest difference is that the borrower must pick a lender from certain approved SBA financial partners. 

Each SBA loan program will also have specific forms that the borrower will need to fill out. The application may also require different documentation than other types of financing. To apply for an SBA loan, you’ll also need to prepare a personal statement and proof that you need the financing, which may include listing other types of financing you’ve tried to use, such as personal funds or assets. 

What are SBA loan requirements?

All SBA loans require that the borrower meet certain standards, including: 

  • They must meet the SBA definition of a “small business” based on their size and annual revenue 
  • They must operate a business in the U.S. or its territories
  • They must operate in specific approved industries
  • The business must have been in operation for at least two years
  • The borrower must have a credit score of 690 or more

Some SBA loan programs have other requirements based on what the loan will be used for.

What is the application process?

The application process for securing an SBA loan is relatively straightforward, although it does require some work to ensure you follow the process correctly. Follow these steps to apply for an SBA loan: 

1. Find a lender

The first step is to find an SBA-approved financial institution to act as your lender. The SBA keeps a list of lenders by location, so you can search on their website to find lenders near you. 

How to find the right lender

Because SBA loans are administered by lenders, each lender can set its own requirements for borrowers. While you can base your lender search on your physical location, you should also find a lender whose requirements are easy for you to meet. 

Many SBA-approved lenders are big banks or credit unions with whom you may already have a relationship. If you have a business bank account or personal checking account at a bank you enjoy working with, it’s a good idea to look into whether or not they offer SBA loans. 

2. Choose your loan type

There are several different types of SBA loans. Most of them require that you use the loan for a specific purpose. Some popular SBA loans include:

  • SBA 7(a) – these are the most popular and common type of loans offered by the SBA. An SBA 7(a) loan can be used for a wide variety of purposes, including working capital, equipment, real estate or even growing an export business. There are several different 7(a) programs that help small businesses get financing for different purposes. You can borrow up to $5 million, depending on which purpose you’re borrowing for. 
  • SBA 504/CDC – these loans are meant for small businesses that will use the financing to create jobs or otherwise help their local community through specific community projects. You can borrow up to $5.5 million for real estate, equipment or other major capital projects. 
  • SBA microloan – these small loans are meant for businesses that need $50,000 or less for business purposes, including working capital, inventory or other operational expenses.

How to choose the right loan for your business

In order to choose the right SBA loan for your business, you need to understand what each loan can be used for and ensure that these requirements align with your plans to use the money. It’s also important to know how much loan you can afford, meaning you shouldn’t borrow more than you really need. While SBA loans do offer good repayment terms and interest rates and are guaranteed by the government, they can still overwhelm you with debt if you can’t pay them back. 

3. Gather your documents

As with any loan, SBA loans require a variety of different documents as part of the application process. It’s important to make sure you know which documents are required and gather them before you start your application to save yourself time and make sure the process runs smoothly. It’s a good idea to check with your specific lender to see if they have any additional required documents, too. 

What documents and evidence are required

You will typically be asked to provide the following documents when applying for an SBA loan:

  • An SBA loan application form – filled out by anyone who has 20 percent or more control of the business.
  • Personal financial statement (SBA Form 413) – this form lists your debts, income and assets. 
  • Personal financial information – this includes three years of personal tax returns and a list of bank accounts and investments. 
  • Personal history – a form that includes your criminal history if you have one.
  • Business financial records – including financial statements such as a profit and loss statement and projected finances, as well as any previous loan applications and business tax returns up to the date of your application (preferably at least three years’ worth).
  • Business documents – including licenses and any business leases. 
  • Personal tax returns – at least three years’ worth for every majority stakeholder (anyone who owns at least 20 percent of the business).
  • Business license or certificate – this will show where you do business and that you’re registered with the state where you operate. 
  • Business lease – this includes rental agreements or any other leasing agreements, if you have one.
  • Business affiliates – a list of your subsidiaries or other business affiliates, if you have any.
  • Personal resumes – this will be the resume or CV of any owner with at least a 20% stake in the business. 
  • Business plan – this will help the lender determine what you need the money for and how you plan to use it for your business. 

4. Apply for your loan

Once you’ve gathered all the documentation, you can apply for the SBA loan through your chosen lender. They will usually have an online portal for you to log into and submit your application online. Your lender may provide you with an account representative to guide you through the process and ask any follow-up questions they may have. 

Track your application

Once you’ve submitted your application, it can take anywhere from a month to several months unless you apply for an SBA Express loan, which requires a response within 36 hours. You can check the status of your application with your lender through their online portal or through your account representative. 

Once your application is approved, you should receive funding quickly and can use the money to push your business forward. 

Get started with Swoop

Get the help you need to find the right financing for your business, including which SBA loan is right for you and which lender may be your best choice. Simply sign-up, answer a few questions, and start getting information on your options today. 

Written by

Kat Cox

As a B2B finance content specialist, Kat Cox's goal is to distill complicated financial issues into useful information for small business owners, to save them time they could be using to build their companies. Her work has been featured in Forbes and on financial health platform Nav.com. When she's not writing blogs, web copy, or fiction, Kat can be found walking her dog or singing karaoke in Austin, Texas.

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