SBA Loans

How to Apply for an SBA Loan: Application Requirements and Steps

Oct 23, 2023 • 7 min read
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      As a small business owner, financing backed by the U.S. Small Business Administration (SBA) represents some of the most affordable types of business loans available. SBA loans are a popular option for both startups and established businesses alike. These loans tend to feature low interest rates, higher loan amounts, and generous repayment terms compared to other business loan options. 

      At the same time, understanding how to apply for an SBA loan and qualify for this type of financing can be complicated. The SBA loan application process can be tedious, and if you don’t complete it properly, you could hurt your chances of getting a loan approval. 

      Here’s what you need to know about how to apply for an SBA loan, including the loan requirements your business may face and the steps you’ll need to complete during the application process.

      Step 1: Decide which type of SBA loan you need.

      There are several different types of SBA loans available to small businesses. With SBA loans, your business may be able to borrow up to $5 million and repay those loans over a period of 10 to 30 years. (Repayment terms can vary.)

      You can find SBA loans to help you finance many different aspects of your business needs. Whether you need startup funding, working capital, equipment financing, inventory financing, or funding for some other type of business need, you may be able to find an SBA loan to support your goals. 

      Below are some of the most common types of SBA loan programs. 

      Once you figure out the type of SBA loan you want, you can determine if your business is eligible for the loan program. 

      Step 2: Check eligibility requirements

      The specific eligibility requirements that your business needs to meet in order to qualify for an SBA loan will vary based on a few factors. First, each SBA loan program has unique requirements you must meet to qualify. In addition, you may need to satisfy additional loan requirements that your SBA-approved lender requires from small business borrowers. 

      The minimum requirements for most SBA loans are as follows. 

      • At least two years in business 
      • FICO® Score of 650 or above 
      • Can meet SBA “small business” size requirements 
      • Business operates in the United States or U.S. territories
      • For-profit businesses only
      • Collateral to secure a large percentage of the loan
      • Unable to access business financing through non-government means (not including personal funds) 

      Step 3: Gather documentation

      Before you apply for an SBA loan, it’s important to gather the documentation your lender will request on your application. The time it takes to move through the SBA process from application to funding will vary. While it might take 30 to 90 days with your local bank, Lendio, on average, can close an SBA 7(a) small loan in less than 30 days. Having your documents prepared ahead of time may help improve your chances of approval and could help you move forward through the SBA loan process at a faster pace.

      Below is a list of the documents you should prepare for your SBA loan application when applying through Lendio for an SBA 7(a) small loan.

      • Six months of business bank statements (connect account or manually upload images)
      • Copy of your driver’s license or state ID
      • Voided check from your business account
      • Month-to-date transactions
      • Two years of business and personal tax returns (for all business principals with 20% or more ownership)
      • Debt schedule
      • Year-to-date profit and loss statement
      • Year-to-date balance sheet

      Additional SBA loan application requirements.

      In addition to the documents listed above, you should be prepared to include more information on your SBA loan application. Details you may need to provide include: 

      • The amount of money you want to borrow.
      • The purpose of the loan and how you plan to use the proceeds if approved.
      • Assets you need to purchase and the name of your business suppliers.
      • When your business started.
      • General information about your business (owners, affiliations, etc.).
      • Your birthday and your Social Security number
      • Details regarding other business debts and your creditors.

      Anyone who owns 20% or more of the business will generally need to fill out an SBA loan application form. Owners will also need to complete a personal financial statement, called SBA Form 413. SBA uses the personal financial statement to assess risk and help determine an applicant’s ability to repay as promised. 

      Step 4: Apply for an SBA loan.

      You can use an SBA loan to support your small business in many different ways. Once you feel ready to begin your SBA loan application, you can start by choosing an SBA lender to guide you through the process. 

      Lendio offers a convenient SBA loan application process. Potential borrowers can complete an application and get a preapproval within 24 hours, and after providing the documentation listed above, can get funded with a 7(a) small loan in less than 30 days.

      Quickly compare loan offers from multiple lenders.

      Applying is free and won’t impact your credit.

      About the author
      Michelle Lambright Black

      Michelle Lambright Black is a nationally recognized credit expert with two decades of experience. Founder of—an online community that helps busy moms take control of their credit and finances—Michelle's work has been published thousands of times by FICO, Experian, Forbes, Bankrate, MarketWatch, Parents, U.S. News & World Report, and many more.

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