An SBA 7(a) loan may provide valuable working capital or help you refinance expensive debt. When you’re shopping for a lender, one important factor to consider is the timeline to funding. While SBA loans typically take longer to process than other types of business financing, their low rates, long terms, and manageable monthly payments generally make them worth the effort.
If you’re considering applying, understanding the process and knowing what to expect can help you move forward with confidence.
What is an SBA 7(a) loan?
The SBA 7(a) loan is the most popular type of SBA loan. The SBA doesn’t issue these loans; instead, it guarantees a portion of the loans from participating lenders.
Key SBA 7(a) loan details:
- Loan amounts: SBA 7(a) maximum loan amount is up to $5 million
- Interest rates: Competitive, generally lower than other small business loans
- Repayment terms: 10 to 25 years (depending on loan purpose)
- Approved uses: SBA 7(a) loans may be used for a variety of uses, including working capital, real estate, equipment, debt refinancing, and more
Because the Small Business Administration backs SBA loans, they typically offer longer repayment terms and lower monthly payments than many traditional small business loans.
SBA loan timeline
The SBA loan process generally takes 60 to 90 days, though the exact timeframe depends on the lender and loan size. While this may seem lengthy compared to other types of financing, the benefits—such as lower interest rates and extended repayment terms—often outweigh the wait.
At SmartBiz®, the process is typically faster, with funding in as little as 30 to 45 days.
The most time-consuming part of the process is usually gathering the required documentation. Since SBA loans are government-backed, more paperwork is required to confirm a business’s financial health and repayment ability. Being organized and working with your accountant may help the process more smoothly.
The SBA loan process
Each business is unique, so there is no fixed timeline for applying and funding. However, an SBA loan application generally follows these steps:
- Business owner gathers documentation and applies for a loan (typically one to 30 days)
- The lender underwrites the loan (typically 10 to 14 days)
- Loan approval and commitment letter issued by lender (typically 10 to 21 days)
- Loan closing and funding (typically seven to 14 days)
Working with a lender with strong customer service and expertise in SBA loans can help make the process smoother. A knowledgeable lender can also guide you through document collection and answer questions to prevent unnecessary delays.
Eligibility requirements for an SBA 7(a) loan
Each lender has slightly different eligibility criteria, but SBA7(a) loan applicants generally must meet these basic eligibility requirements:
- At least two years in business
- A personal credit score of 650+ (675+ for SBA commercial real estate loans)
- A U.S.-based business owned by a U.S. citizen or lawful permanent resident who is at least 21 years old
- No outstanding tax liens
- No bankruptcies or foreclosures in the past three years
- No recent charge-offs or settlements
- Current on any government-related loans
Some lenders may require a business plan, while others do not. SmartBiz, for example, does not require a business plan, simplifying the application process.
Advantages and disadvantages of SBA 7(a) loans
Taking on small business debt—even at low rates—is a big decision. Consulting with a financial professional before moving forward is always a good idea. Here’s a quick look at the advantages and disadvantages of an SBA 7(a) loan.
SBA 7(a) advantages
- Highly competitive, low interest rates
- Long loan terms (10 years for traditional 7(a) loans, 25 years for SBA commercial real estate loans)
- Fixed and variable-rate options available
- Broad eligibility for different types of businesses
- Wide range of approved uses for loan proceeds
- Fully amortizing loans—no balloon payments to worry about
- No prepayment penalties (for most 7(a) loans under 15 years)
SBA 7(a) disadvantages
- Longer approval process compared to alternative loans
- Extensive documentation required
- Not all businesses qualify (certain industries, such as real estate investing and gambling, are ineligible)
- Higher credit score requirements than some alternative financing options
How to apply for an SBA 7(a) loan
Applying for an SBA 7(a) loan takes preparation. The best approach is to stay organized, set realistic expectations, and work with your accountant or financial professional to gather the necessary paperwork.
1. Determine eligibility
Before applying, confirm that you meet both SBA and lender-specific requirements. You don’t want to invest time if you don’t qualify.
2. Gather the required paperwork
Regardless of the lender, having the necessary documentation in order will help streamline the process. Expect to provide, at minimum:
- Personal & business tax returns
- Personal financial statements (required from each individual owning 20% or more of the business)
- Profit and loss statement
- Balance sheet
- Debt schedule
- Entity formation documents (LLC, S-Corp, etc.)
- Lease agreement (if applicable)
- Collateral details (if required)
- Some lenders may also require a business plan, though SmartBiz® does not require one.
3. Connect with an SBA loan lender
Finding the right lender can make or break your SBA loan experience. Some banks have stricter requirements or longer processing times than others. Instead of applying to multiple lenders and risking unnecessary rejections, SmartBiz streamlines the process to help you secure the right funding for your business.
See if you prequalify by answering a few simple questions and get on the path to fast, easy, and transparent funding.
Final thoughts on SBA loan timelines
The SBA loan process may take two to three months from application submission to funding. However, a little preparation can make the process more efficient. Gathering your paperwork early and working with a lender specializing in SBA loans may increase your chances of a smooth approval.
While these loans may require more documentation than other financing options, SBA 7(a) loans are known as one of the best small business loan options available due to their low rates, long terms, and flexible use of funds. If you’re ready to take the next step, see if you prequalify today. The right SBA loan may set your business up for long-term success.
