What you need before you start an SBA loan application
Before you contact a lender, gather these documents: your business plan (2 to 3 pages describing what you do, who your customers are, and how you'll use the money), personal tax returns for the last two years, business tax returns if your business has been operating for more than a year, a current personal credit report, and a list of business assets and personal assets you're willing to pledge as collateral. You'll also need your Social Security number, business license, and proof of citizenship or legal residency.
The SBA itself does not lend money directly in most cases — banks and credit unions do, using SBA guarantees to reduce their risk. This means the lender sets the actual terms, interest rates, and fees. Different lenders have different requirements beyond the SBA's baseline, so what one bank asks for may differ from another.
Have a clear number in mind for how much you need and what you'll spend it on. Lenders want to see that you've thought through whether the loan size matches your actual need — asking for $50,000 when you only need $15,000 raises questions about your planning.
Key Takeaways
- You apply through a bank or credit union, not the SBA directly, and the lender decides whether to approve you and on what terms.
- You'll need a business plan, two years of personal tax returns, business tax returns if applicable, and a personal credit report before you contact a lender.
- The SBA guarantees a portion of the loan (usually 50 to 90 percent depending on the program), which means the bank takes less risk but you still owe the full amount.
- Approval timelines range from two weeks to two months depending on the lender, the loan size, and how complete your application is when you submit it.
Finding a lender that offers SBA loans
Not every bank offers SBA loans, and not every bank that does offers every SBA program. Start by calling your current bank or credit union and asking whether they participate in SBA lending. If they don't, ask for a referral to a lender in your area that does.
The SBA maintains a searchable database of lenders on its website (sba.gov). You can filter by state, county, and loan program to see which banks and credit unions near you are active SBA lenders. This list updates regularly, so a lender shown as active may have paused new applications temporarily due to volume.
Community development financial institutions (CDFIs) and nonprofit lenders often specialize in SBA loans for borrowers who don't meet traditional bank standards — lower credit scores, shorter business history, or businesses in underserved areas. These lenders typically charge higher interest rates but may move faster and ask fewer questions about collateral.
The application process and what lenders review
Once you've chosen a lender, you'll fill out SBA Form 1919 (the Loan Application form) and provide the documents listed above. The lender will also ask you to complete their own application, which may ask for additional information about your business, your industry, and your personal finances.
The lender reviews your credit score, your payment history on other debts, how long your business has been operating, your annual revenue, and how much profit you make. They'll also look at your personal net worth — the total value of your assets minus your debts — because most SBA loans require a personal may provide, meaning you're personally liable if the business can't repay.
If your business is new (less than two years old), the lender will weight your personal credit and assets more heavily, because there's no business track record to review. If your business is established, they'll focus more on business financials: profit and loss statements, balance sheets, and cash flow projections.
How the SBA may provide works and what it means for you
The SBA doesn't lend you money — it guarantees to the bank that it will cover a portion of the loan if you default. For most SBA loans, the may provide is 75 to 90 percent of the loan amount. This means the bank's risk is lower, so they're willing to lend to borrowers with weaker credit or less collateral than they would for a conventional loan.
The may provide does not reduce what you owe. You still repay the full loan amount to the bank, at the interest rate and terms the bank sets. If you stop paying, the bank will pursue collection against you, and the SBA may provide only protects the bank — not you.
You will pay a may provide fee to the SBA, which the lender typically adds to your loan amount. This fee ranges from 2 to 3.75 percent depending on the loan size and program. You'll also pay the bank's origination fee (usually 1 to 2 percent) and interest, which varies by lender and your creditworthiness but typically ranges from 7 to 13 percent for SBA loans.
Timeline from application to funding
A straightforward SBA loan application takes two to four weeks from submission to approval if your documents are complete and your finances are clear. If the lender needs to ask follow-up questions, verify information, or order a business valuation, add another two to four weeks.
Once approved, the lender prepares loan documents for you to sign. You'll review these with a lawyer if you choose (recommended for loans over $50,000). Signing and funding typically happen within one week of approval.
The slowest part is usually the initial review. Lenders process applications in the order they receive them, and during busy seasons (spring and early fall for many businesses) the queue can be long. Submitting a complete application with all documents attached speeds this up significantly — incomplete applications get sent back, adding weeks to the timeline.
What happens if you're denied
If a lender denies your application, they must tell you why in writing. Common reasons include insufficient credit score, too much existing debt relative to your income, a business plan that doesn't show clear revenue potential, or insufficient collateral to secure the loan.
You can ask the lender to reconsider if you believe they made an error, or you can apply to a different lender — different banks have different standards. You can also address the specific reason for denial (for example, paying down other debts to improve your debt-to-income ratio) and reapply in a few months.
If you were denied because of credit issues, you have the right to a free copy of your credit report from each of the three major bureaus (Equifax, Experian, TransUnion) once per year at annualcreditreport.com. Review it for errors and dispute any inaccuracies with the bureau.
Frequently Asked Questions
Do I need collateral to get an SBA loan?
Most SBA loans require collateral — typically business assets like equipment, inventory, or real estate, plus a personal may provide on your home or other personal assets. Microloans (under $50,000) sometimes require less collateral. Ask the lender what they'll accept before you apply.
What credit score do I need?
The SBA doesn't set a minimum credit score, but most banks require 620 or higher. Some lenders will work with scores as low as 580, particularly CDFIs. Your score is one factor among many — a lower score doesn't automatically disqualify you if your business is profitable and you have collateral.
Can I get an SBA loan if my business is less than a year old?
Yes, but it's harder. Lenders will focus heavily on your personal credit, your business plan, and your industry experience. You'll need to show that you understand the market and have a realistic path to profitability. Some lenders have a minimum operating period of six months; others will lend to startups with strong personal financials.
How much can I borrow?
It depends on the SBA program. Standard 7(a) loans go up to $5 million. Microloans cap at $50,000. CDC/504 loans (for real estate and equipment) go up to $5.5 million. The lender will also set a limit based on your ability to repay — they won't lend you more than your business can reasonably service.
What if I have a partner or co-owner?
All owners with 20 percent or more stake in the business must sign a personal may provide and provide personal financial information. The lender will review each owner's credit and assets. If one owner has poor credit, it may affect the whole application, though some lenders will work around this if the other owners are strong.