How Long Does It Take to Get an SBA Loan? A Step-by-Step Guide

Jul 02, 2024

#### Introduction

Securing an SBA loan can be a critical step for small businesses looking to finance growth, purchase equipment, or manage cash flow. However, the timeline for obtaining an SBA loan can vary based on several factors, including the type of loan, the lender’s processes, and the preparedness of the borrower. This blog provides an overview of the typical timeframes for different SBA loans and what can affect these timelines.

#### Typical Timeframes for SBA Loans

1. **SBA Express Loans**
   - **Approval Time**: Within 36 hours
   - **Funding Time**: Typically 30-60 days
   - **Details**: SBA Express Loans offer a quick approval process, but the actual funding can take a month or two, depending on the lender’s processing time and the borrower’s preparedness.

2. **Standard 7(a) Loans**
   - **Approval Time**: 5-10 business days
   - **Funding Time**: 30-90 days
   - **Details**: Standard 7(a) loans have a more involved application and approval process, which can take a few weeks. Once approved, the funding can take an additional month or two.

3. **SBA 504 Loans**
   - **Approval Time**: 30-45 days
   - **Funding Time**: 60-90 days
   - **Details**: SBA 504 loans, typically used for real estate or equipment purchases, have a two-part approval process involving both the lender and a Certified Development Company (CDC). This adds to the overall timeline.

4. **Microloans**
   - **Approval Time**: 7-14 days
   - **Funding Time**: 30-60 days
   - **Details**: Microloans, which are smaller loans up to $50,000, usually have a faster approval process. However, the time to receive funds can still take a month or more.

#### Factors Affecting the Timeline

1. **Lender’s Efficiency**
   - **Lender Processing Time**: Different lenders have varying processing times. Some lenders are more efficient and can expedite the process, while others may take longer.
   - **Lender Experience**: Lenders with extensive experience in SBA lending tend to process applications more quickly.

2. **Borrower Preparedness**
   - **Complete Documentation**: Providing all necessary documentation upfront can significantly speed up the process. Incomplete or missing documents can cause delays.
   - **Responsive Communication**: Quick responses to lender requests for additional information or clarification can help keep the process on track.

3. **Loan Complexity**
   - **Loan Size and Type**: Larger loans or more complex loan structures typically require more detailed analysis and documentation, which can extend the timeline.
   - **Collateral Requirements**: Loans requiring collateral appraisals or additional legal documentation can take longer to process.

4. **Government Processing Times**
   - **SBA Involvement**: The level of direct involvement by the SBA, especially for larger or more complex loans, can affect the timeline. The SBA’s processing speed can vary based on their current workload.

#### Tips to Expedite the Process

1. **Prepare Thoroughly**: Gather all required documentation and ensure your business plan, financial statements, and other necessary paperwork are complete and accurate.
2. **Choose an Experienced Lender**: Work with lenders who have a proven track record of processing SBA loans efficiently.
3. **Stay Responsive**: Respond promptly to any requests from your lender for additional information or clarification.
4. **Consult with Advisors**: Financial advisors or SBA loan consultants can help streamline the application process and avoid common pitfalls.

#### Conclusion

The time it takes to get an SBA loan can vary widely, from a few weeks to several months, depending on the type of loan, lender efficiency, borrower preparedness, and loan complexity. Understanding these factors and preparing thoroughly can help expedite the process and secure the necessary funding for your business.

At Atlantic Commercial Lending, a Licensed Commercial Mortgage Brokerage with an NMLS ID #2429887, we specialize in guiding businesses through the SBA loan process efficiently. Contact us today for personalized advice and to explore the best financing options for your business.

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