The Small Business Administration (SBA) helps business owners have more working capital. They are a great source if you need a loan to start your business or expand. Since it takes about 60 to 90 days to get SBA loans, they are not a good option if you require immediate cash. If you have time to wait, this is a viable option for you.
You might find the process overwhelming and complicated if it is your first time applying for an SBA loan. It is important that you first understand how the process works so that you feel more comfortable applying.
Step 1: collect the appropriate documents and apply for the loan. This can take anywhere from one to 30 days.
Step 2: the loan officer will review your application and underwrite the loan within 10 to 14 days.
Step 3: the lender will approve your loan which takes about 10 to 21 days.
Step 4: the lender will close on the loan in about seven to 14 days.
The SBA loan approval process from application to closing is about 60 to 90 days. This time frame is not fixed because there are many factors that can play a role in the SBA loan timeline.
The type of loan program you apply for and the amount of money you wish to receive will be considered. If you apply for a large loan with a long term, you can expect the process to take longer than someone who opts for a smaller loan with a shorter term.
Due to COVID-19, the SBA might take longer than usual for them to approve you for a loan due to the influx of applications. If you applied for a SBA Paycheck Protection Program loan, note that you can still apply for other SBA disaster loans. However, you cannot use both loans for the same business purpose.
An SBA loan can take some time it is often worthwhile because of the many benefits it offers. Some of the perks of SBA loans include:
If you can wait a long time to get approval for an SBA loan, it is worth it. Otherwise, your best bet is to go with an alternative lender. Also, your personal credit and business credit score play a role in your approval so if your scores are not strong, you might not get approved.