What Does the SBA Loan Processing Time Look Like?

A U.S. Bank study tells us that about 82% of businesses fail due to poor cash management. While responsibly managing cash flow involves a number of facets, one avenue that many small business owners take is securing additional financial support to boost their operations. SBA loans are a common choice — but what is some important information you need to know about them? Importantly, what is the SBA loan processing time and what can you expect throughout this process? Let’s dive in!

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What is an SBA loan?

The Small Business Administration offers financial assistance in the form of various loans, including 7(a) loans, 504 loans, and microloans. The loans are partially guaranteed. This means that if the borrower cannot repay the loan, then the lender (a bank or credit union) can recover a certain percentage of the balance from the SBA. In other words, SBA loans are lower-risk for lenders, which is good news for small business owners.

Proving eligibility for an SBA loan can be challenging as their standards and requirements are fairly strict. However, the terms are flexible and borrowers can typically secure lower interest rates. This makes SBA loans one of the more reasonable ways to secure financial support for a small business.

What is the SBA loan processing time?

If you’re a small business and you’re curious about the process of requesting financial help, what does the SBA loan processing time look like? Let’s break it down into steps.

1. Applying for the loan

The first step for the borrower is to gather all of the documentation they’ll need for their application. While the various types of SBA loans might have different requirements, these can include:

  • Financial statements, like your profit and loss statements
  • Loan application history
  • Income tax returns
  • Business license or certificate

Time: 1 to about 30 days.

2. The lender underwrites the loan

An underwriter is a financial expert. They’re going to take a look at all of your finances and consider if and how much of a risk you are to a lender. This helps to determine your eligibility for your SBA loan. During this stage, the underwriter and lender will assess your:

  • Income
  • Assets
  • Debt
  • Property

Time: 10 to about 14 days.

3. The lender approves your loan

If you’re approved for your SBA loan, then the lender is going to send a commitment letter. A letter of commitment is a binding agreement between the lender and the borrower. This is going to outline all of the terms and conditions of the SBA loan.

Time: 10 to about 21 days.

4. The lender closes on the loan

This is the final step in the process. During the closing, the lender, borrower and any other parties will sign all applicable documents to officially hand the responsibility of the loan over to the borrower. This might also be called the “settlement”.

Time: 7 to about 14 days.

How long does the SBA loan process take?

Considering the general SBA loan processing timeline we’ve outlined, it can take anywhere from approximately 30 to 90 days to secure a loan as a small business.


What determines the SBA loan timeline?

No two cases are exactly alike, and there are a few variables here that can impact your SBA loan processing time.

  • The type of loan program you’re applying for
  • The amount of money you’re applying for
  • The lender you’re working with

1. The type of loan program you apply for

As we mentioned earlier, there are various types of SBA loans. As their individual requirements vary, the SBA loan processing time can also fluctuate. For example, because microloans go from $500 to $50,000 (making them the smallest loans), they’re typically easier to get approved for.

2. The amount of money you’re applying for

On a similar note, sometimes, the more money you’re requesting to borrow, the longer it can take to get approved for it. This is because the lender is determining: (1) if your business really needs this much money; and (2) whether or not your small business will be able to manage the repayments on time. Again, it’s largely about determining how risky you are for lenders.

3. The lender you’re working with

In addition to each type of SBA loan having its own requirements, every lender — meaning banks and credit unions — will have its own requirements as well. You’ll also need to meet the SBA’s requirements. These include operating in an eligible industry and having a good credit history and solid financials.

Should you take out an SBA loan or another loan?

While SBA loans are a common solution for small businesses all across the country, you do have options. Some alternatives to SBA loans include:

  • Credit cards: Easier to qualify for and offer certain perks, but interest rates are higher
  • Lines of credit: Higher limits and lower interest rates, compared to credit cards.
  • Merchant cash advances: Cash that’s fronted in exchange for a percentage of future sales, until the balance is paid off
  • Crowdfunding: Funding isn’t guaranteed but also doesn’t need to be paid back
  • Term loans: A lump sum that’s repaid over a fixed period of time
  • Short-term loans: Repaid faster than a term loan with more frequent payments
  • Grants: Stricter approval criteria but don’t need to be paid back
  • Microloans: Typically $5,000-$10,000 with lower interest rates

How can you find the best type of financial support for your business?

As a small business, there are plenty of ways to find extra financing, whatever you may need it for. If you need help deciding, consider the following questions:

  • How much money do I want to borrow?
  • What do I want to use this money for?
  • What do I have working in my favor, in terms of eligibility (credit score, borrower history, etc.)?
  • What kind of monthly payments can I manage?
  • How quickly and frequently can I make my repayments?
  • If I’m not able to repay the loan, what am I able to offer as collateral, if anything?
  • How soon do I need the money?

This information may help you as you determine what you might be able to qualify for, and if it’s the best option for your small business.

Applying for your SBA loan

SBA loans are a common way for small businesses to get on track financially. The SBA loan processing time is anywhere between approximately 30 and 90 days. Your individual experience will vary depending on factors like the type of loan program you’re applying for, the amount of money you’re asking for, and the lender you’re working with. Thorough due diligence — and carefully considering your own situation — will help you better understand if you should pursue an SBA loan or another type of loan.

SmartBiz® has a robust network of lenders ready to help small businesses thrive. We’ll match you with the right lender for you to meet your business’s needs. In just five minutes, see if you pre-qualify for up to $350,000, with no impact on your credit score.* Are you looking for financial support? Apply now to see if you qualify.


*We conduct a soft credit pull that will not affect your credit score. However, in processing your loan application, the lenders with whom we work will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and happens after your application is in the funding process and matched with a lender who is likely to fund your loan.

WHAT YOU NEED TO KNOW: The SmartBiz® Small Business Blog and other related communications from SmartBiz Loans® are intended to provide general information on relevant topics for managing small businesses. Be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed. Please consult legal and financial processionals for further information.