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The U. S. The Small Business Administration (SBA) assists business owners in obtaining the funding they require to launch, grow, and succeed their enterprises. Compared to some traditional loans, these loans are frequently simpler to qualify for. SBA loan approval and funding, however, can take much longer than most loans—typically between 60 and 90 days. Because of this, SBA loans aren’t the best option for business owners who require quick cash.
The following information on SBA loan approval times and how they compare to those of other business financing options is important to know.
Overview of SBA Loans
The SBA doesn’t lend money directly to small business owners. Instead, depending on the loan program and amount, the SBA guarantees up to 85% of the loan amount. As a result, lending money to applicants is less risky, and SBA-approved lenders are more likely to work with small business applicants they might not have otherwise accepted. Having said that, there are various SBA loan programs, each with particular eligibility standards and conditions:
Despite the lengthy application process, SBA loans may be easier to qualify for than other forms of business financing. A business plan, copies of your personal and business tax returns, business balance sheets, profit and loss statements, and a list of your current business debts are all required.
How to Get Approved for an SBA Loan
From application to funding, the SBA loan approval process takes 30 to 90 days. However, this time frame varies by lender and loan type. Although the precise steps for obtaining an SBA loan can vary from lender to lender, there are a few standard stages:
How Will I Know If My SBA Loan Is Approved?
The SBA will email you the loan details if your loan is approved. If you haven’t received an email and want to find out the status of your application, get in touch with the SBA directly. You might also be able to check the status of your application online or by getting in touch with your loan officer, depending on your lender.
How Long Does It Take to Get SBA Loan Funds After an Approval?
It typically takes the lender five days to disburse loan funds after an SBA loan is approved, but it may take up to 14 days. However, the actual time it takes for you to receive loan funds will vary depending on the lender and the bank of the business.
SBA Loan Process vs. Other Business Loans
The lengthy SBA loan approval process does not meet the borrowing requirements of all small business owners. Other business loans may be able to provide funds more quickly and occasionally with less onerous application criteria. Comparing the SBA loan application process to some other popular financing choices is as follows:
Find the Best Small Business Loans of 2022
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A small business owner with experience in real estate and financing, Kiah Treece is a licensed attorney. Her primary goal is to help people and business owners take control of their finances by demystifying debt. The Forbes Advisor editorial team is independent and objective. We receive money from the businesses that advertise on the Forbes Advisor website to help fund our reporting efforts and to keep providing this content without charge to our readers. This compensation comes from two main sources.
Does SBA loan have to be paid back?
Key Takeaways. Small businesses can grow their operations with SBA loans for long- or short-term capital, asset purchases, or startup costs. Small businesses are required to repay loans from SBA partner lenders that they receive.
How long is an SBA disaster loan?
Depending on ability to repay and SBA policy, the maximum loan term is 30 years. There are no prepayment penalties.
What is the minimum loan amount for SBA?
An SBA 7(a) loan for your company is available for any sum up to $5 million. It’s good news for small businesses that the loan has no minimum requirement.
How long does it take to get SBA loan once approved?
For its express loans, the SBA promises a turnaround time of 36 hours. But that does not account for the time needed for the lender to approve the loan, which may add a few more weeks to the process. So, after everything is said and done, you can expect the SBA loan processing time to take 30 to 60 days rather than 60 to 90 days.