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Everything You Need To Know About SBA Loans – Q & A

A grocery that was funded with the help of SBA loans

As a small business owner, you may be wondering if an SBA loan is the right option for you. In this blog post, we’ll provide the questions our clients ask and their answers regarding how to go about getting an SBA loan. We’ll outline what to expect along the way so you can make the best decision for your business. 

What qualifies as an SBA small business?

Depending on what industry you’re in, the SBA will have its guidelines for what constitutes a business that is considered “small”. You can use SBA’s size standards tool to determine what size business you are classified as. 

What income is considered a small business?

The SBA considers any business with less than 1500 employees or bringing in less than $40 million in revenue “small”.

How does SBA calculate annual receipts?

The Small Business Association (SBA) uses an averaging method to calculate annual receipts. They take the last three years’ worth of data for your company’s average weekly revenue and multiply it by 52, which will show the estimate of your company’s annual revenue.

How do I get my SBA loan approved?

To be eligible for the SBA 7(a) loan, you must meet several preliminary requirements. Your company must be officially registered as a for-profit business that wishes to do business in the United States or its possessions. You’ve got to have a reasonable amount of invested equity and be small, as defined by SBA.

The SBA also likes to see that you’ve invested personal assets in the business, proving your commitment to being vested and successful. Last but not least, don’t be delinquent on any U.S. government debt.

How long do SBA loans take to get approved?

The SBA express loans have an approval time of 36 hours. According to the SBA website, the SBA 7a loan usually takes about 5-10 business days to underwrite. However, many other steps make the process take about 2-3 months. 

Does SBA processing mean approved?

This status means that your loan application package has been submitted to the lender for processing and is in review.

How long does it take for an SBA disaster loan to be approved?

SBA disaster loans are typically approved within two weeks of applying. The approval for these types of loans is much less stringent than regular SBA loans.

How do I know if I got approved for an SBA disaster loan?

Usually, you’ll get an email update when any changes happen to your account. But if you need to find out if you got approved for the SBA disaster loan faster, you can check on the SBA’s website portal or call their customer service line with your loan number handy. 

How do I know if my SBA loan is approved?

The SBA has a customer service center that you can call to find out if your application for a small business loan was approved. You can also email or visit the SBA website to get an update on your application. Usually, you’ll get an email update when any changes happen to your account.

How long does it take to get an SBA loan once confirmed?

The typical approval process takes two to three months, but some lenders offer funding within 30 days. 

How can I get an SBA loan approved fast?

The fastest possible way to get an SBA loan would be with the SBA Express program, which features a 36-hour underwriting decision time. Other loan types have a 5-10 business day turnaround time. 

What happens when an SBA loan is approved?

When your SBA loan is approved, the process should take approximately five to seven business days to fund your account. 

Do SBA loans require collateral?

Some people are wondering if they need collateral to get a 7a loan. No for loans up to $350,000. Anything more than $350K and SBA will ask for as much collateral to match the loan amount as possible.

How do you pay back an SBA disaster loan?

There are three ways to pay back your SBA loan. You can go to Pay.gov and set up an account to pay online, set up an auto online bill pay from your checking account, or mail a check.

Can I use an SBA disaster loan to buy equipment?

The SBA offers disaster loans to help people recover from the damages caused by natural disasters, such as a hurricane. This type of loan may be used for repairing or replacing equipment in your business that has been damaged due to this event so you can get back on track quickly!

Can I buy a computer with an SBA loan?

You can use SBA loans to buy new computers, furniture, office equipment, accounting systems, payroll software, and anything to help your business grow!

How can I get my SBA loan forgiven?

To apply for direct forgiveness through SBA, you need to determine if your lender participates in this program, complete the correct form and submit the form with the required documents.

How are SBA loans forgiven?

The SBA will not forgive 100% of what you owe, but they do have the room to make a compromise. If the compromise is approved, your loan will be classified as “Compromised/Closed” instead of something more derogatory on your credit report.

What do I do if my SBA loan is denied?

If you’re denied the SBA loan, you can look into why you were denied and see if you could meet those requirements in the near future and apply again after 90 days of getting denied. 

Can I reapply for an SBA loan if I was denied?

You have 90 days from the date of denial to reapply and strengthen your application. Work with your lenders if necessary to meet all requirements before submitting the paperwork again. 

We will help you grow your small business.

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