How Long Does it Take to Get an SBA Loan?

SBA 7(a) loans: 60-90 days.

The SBA’s most common loan program is the SBA 7(a) loan. This general purpose loan can provide borrowers with up to $5 million in funding. Eligible business owners can use SBA 7(a) loan proceeds for a variety of business expenses, including the purchase of commercial real estate, working capital, business supplies, furniture, and fixtures, and to refinance existing business debt. 

Getting matched with a lender: 2 days.

The federal government guarantees a portion (up to 75%) of SBA 7(a) loans. However, the Small Business Administration itself does not issue loans to business owners. Instead, SBA loans come from the same lenders you would seek out for traditional business loans. 

If you’re interested in applying for an SBA 7(a) loan, the first step you’ll need to complete is getting matched with an SBA lender that’s capable of meeting your needs. You can complete this step online via the U.S. Small Business Administration’s lender match tool. 

The lender match process requires you to complete a brief questionnaire. After you do so, it could take a few days for the system to locate a lender match for your business (though sometimes the process is faster).

Gathering documentation and applying for the loan: Up to 30 days.

The next step in the SBA 7(a) loan application process is typically the lengthiest and the most difficult for you, the business owner, to complete. SBA loans feature extensive paperwork and documentation requirements. Below is a sample—though certainly not a comprehensive list—of items your lender may want you to include with your SBA loan application. 

• Business licenses
• Detailed list of debts
• Current income statement
• Personal income tax returns (previous three years)
• Business income tax returns (previous three years)
• Business financial statements (profit and loss statements, cash flow projections, etc.)
• Loan application history
• Resumes for principal owners
• Real estate appraisals (collateral)
• Lease agreements (collateral)
• Franchise, asset purchase, real estate purchase, or other purchase agreements (based on loan purpose) 

Depending on the loan purpose and your business’ record-keeping habits, this step might take anywhere from a few days to an entire month. 

Underwriting: As little as 2 weeks up to 3 months.

Once the application is complete and submitted with all required documents, the loan enters the underwriting phase. This is when the lender reviews all the information and documents you provided to determine your eligibility. The underwriting process for an SBA loan can range significantly in duration. Some lenders are able to expedite their review and make a decision within as little as two weeks. However, for more complex applications or during times of high demand, this process can extend up to three months.

During underwriting, the lender assesses the risk of lending to your business, which includes evaluating your financial statements, credit history, business plan, and the collateral you’ve offered. To improve your chances of a favorable outcome and possibly expedite this process, ensure all documentation is accurate, comprehensive, and well-organized.

Waiting for a loan decision: 1-3 weeks.

Once you submit your loan application, it can take several weeks for a lender to review your documents and underwrite your loan. During the application review and underwriting process, the lender will analyze your creditworthiness (aka your likelihood to repay debts) and your capacity to repay (aka whether you can afford additional debt). 

Other details a lender may evaluate include:

• Value of collateral provided
• Business revenue
• Credit history (personal and business)
• Credit scores (personal and business) 
• Personal and business debts

If your application passes through the underwriting process and a lender approves your application, the next step will be to schedule a loan closing date. 

Receiving your loan proceeds: 1-2 weeks (sometimes up to 90 days).

Once a lender approves your application for an SBA 7(a) loan, it will put together some paperwork to finalize your loan agreement. This process also takes time. (Note: For commercial real estate transactions, you might also have to hire an attorney to facilitate appraisals and title work, and process other legal documents that could add more complexity and time to this process.)

It’s common for an SBA lender to need several weeks to prepare the paperwork you will need to review and sign before you can receive your loan proceeds. That time frame can easily be doubled, tripled, or more with commercial real estate transactions. And some banks warn that the loan closing process for SBA 7(a) loans could take up to three months.

SBA Express loans: 30-60 days.

Another popular Small Business Administration loan program is the SBA Express loan. With the SBA Express Program, qualified borrowers can receive up to $500,000 worth of funding for their businesses. And for loans of $50,000 and under, lenders do not have to require collateral from borrowers. 

After you complete your application for an SBA Express Loan, you can expect to receive a response from the Small Business Administration within 36 hours. However, the lender makes the final eligibility decision. From application to funding, the entire SBA Express Loan process could potentially take as little as 30 days. 

It is important to note that the federal government guarantees only up to 50% of SBA Express loans. By comparison, the SBA 7(a) loan features a 75% guarantee that lenders can rely on in the event of a default. As a result, SBA Express loans are riskier for SBA lenders to issue. So, they might not be as easy to qualify for, depending on the details of your loan application.

SBA 504 loan: 60-90 days.

SBA 504 loans can be a helpful financing option for small business owners who need affordable financing options for certain types of commercial real estate purchases, machinery, or equipment. Eligible borrowers may receive up to $5 million in funding. For certain energy projects, the maximum loan amount may extend to $5.5 million.  

504 loans are backed (in part) by the SBA and made available through Certified Development Companies, also called CDCs. These are nonprofit corporations that aim to promote economic development in local communities. Around 50% of the total project is typically financed through a private business lender as well, along with at least a 10% down payment from the business owner (sometimes up to 20% down). The SBA-backed portion of the loan comes in the form of a second mortgage for up to 40% of the eligible project costs.  

You can start the application process for a CDC/504 Loan by searching for a local CDC on the SBA’s website. In general, SBA 504 loans can take several months to process. Most borrowers will wait at least two to three months from the time they submit their initial loan application before they receive their loan proceeds (assuming all goes well and they qualify for funding).

Note that you cannot use a 504 loan for working capital, inventory, consolidating or refinancing debt, or investing in rental properties. However, these SBA loans may work well for purchase of real estate assets or equipment that can promote job creation or business growth. Companies that will use funding to improve or modernize existing facilities, land, streets, landscaping, etc., may also be eligible for this SBA loan program.

SBA microloan: 30-90 days.

Small business owners can use the SBA microloan program to borrow up to $50,000 to cover eligible business expenses. The average size of an SBA microloan is $13,000. Even though most microloans feature smaller loan amounts, the intermediary lenders that issue the loans (typically nonprofit community-based organizations) may require collateral, plus a personal guarantee from the business owner. 

Although lenders issue microloans for smaller amounts, the loan process can still be slow. If your small business qualifies for funding, it’s common for it to take between 30 and 90 days between the initial loan application and the receipt of your loan proceeds. Remember, both the SBA and an intermediary lender will have to approve your loan application.

Eligible microloan borrowers can use the funding they receive to support their small business in a variety of ways including to purchase inventory, equipment, supplies, machinery, furniture, and to provide essential working capital. However, business owners cannot use SBA microloan funds to purchase real estate or consolidate existing debts.

Factors that affect SBA loan processing times.

Several factors can impact the processing time of SBA loans, making some applications move faster or slower through the pipeline. Understanding these factors can help applicants set realistic expectations and better prepare for the application process. Key elements that affect SBA loan processing times include:

• Business readiness: The more prepared a business is with its financial statements, business plans, and required documentation, the faster the application process can proceed. Incomplete applications or missing documents can significantly delay the process.
• Lender experience: Working with a lender that has extensive experience with SBA loans can also affect processing time. SBA Preferred Lenders, for example, have the authority to process, underwrite, and finalize most SBA loans without direct SBA review, which can speed up the approval and funding process.
• Loan complexity: Larger loan amounts, or loans used for more complex projects (such as purchasing real estate or starting new construction), may require additional documentation and verification, extending the processing time.
• Time of year: Application volume can vary throughout the year, impacting processing times. Periods of high demand can slow down the process, as lenders and the SBA manage a larger queue of applications.
• Accuracy of information: Inaccuracies in the application or documentation can lead to delays as these issues are identified and corrected. Thoroughly reviewing all information before submission can prevent unnecessary setbacks.
• Economic and policy environment: External factors, such as changes in government policy or economic conditions, can influence processing times. For example, during economic downturns or following natural disasters, the volume of applications may increase, slowing down the process for all applicants.

By being aware of these factors, applicants can take proactive steps to mitigate potential delays, such as choosing an experienced lender, ensuring their documentation is complete and accurate, and applying during lower-demand periods when possible.

Bottom line

The U.S. Small Business Administration provides many attractive financing options to support small business owners throughout the country. And when it comes to the cost of the loan and loan terms, SBA loans tend to be generous in both areas.

With a proprietary application platform that makes uploading documents fast and easy and a dedicated SBA team on call to answer any questions you have and assist you throughout the funding process, we’ve made it as easy as possible for business owners to access an SBA loan. Learn more about applying for an SBA loan.