How to apply for an SBA 7(a) loan
Applying for an SBA 7(a) loan takes some work on a business owner’s part to submit accurate financial documents and other paperwork. Because of the COVID-19 pandemic’s effect on small businesses, SBA 7(a) lenders now have additional questions regarding how your business is operating.
Your best bet is to be as organized and prepared as possible and have realistic expectations about effort and timing. A good strategy is to work with your bookkeeper, accountant, or another small business financial professional to gather paperwork. Here are steps to help the process move smoothly.
1. Determine Eligibility
Before beginning your application, make sure that you meet basic eligibility requirements. You don’t want to invest your valuable time if you don’t qualify. Eligibility requirements, in addition to SBA requirements, can vary from lender to lender.
2. Prepare a Business Plan (Note: SmartBiz does not require a business plan)
Submitting a business plan is a unique opportunity for you to present a roadmap with concrete details on how you plan to achieve your goals. A business plan will help you set milestones to measure success and position yourself within your industry. You’ll give lenders an accurate picture of where you’re headed in the future.
3. Gather the paperwork
No matter which lender you’re working with, having all the necessary documentation is crucial to obtaining your funds as quickly and efficiently as possible. As you’re progressing through the application, you’ll need to demonstrate that you’re able to make regular payments. Some of the most common documents that our bank partners request include:
- Personal & Business Tax Returns
- Personal Financial Statements, required from each individual owning 20% or more of the company
- Profit and Loss Statement
- Balance Sheet
4. Prepare for questions about your operations during the coronavirus shutdown
Since the pandemic, lenders will also want to know:
- The industry you operate in and how it was impacted overall
- How the COVID-19 pandemic has impacted your business
- Changes you’ve put in place to mitigate the financial impact
- How you will use the funds to rebuild
5. Connect with an SBA Loan Lender
Avoid going from bank-to-bank to find a lender who will approve your application. When you work with SmartBiz Loans, we’ll help you increase your likelihood of getting a “Yes” by matching you with the bank partner most likely to fund your business. See if you prequalify* by answering a few questions about your business and you’ll be on your way to applying for quick, easy, and transparent funding.
For additional information about SBA 7(a) loan applications, review this article from the SmartBiz Small Business Blog: 4 Ways to Prep for a Stellar Small Business Loan Application.
*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.
The SBA loan process may take two to three months to come together from gathering documentation to funding. You’ll need to budget time to organize paperwork before submitting an application to streamline the process. Although SBA loans require more information from a business owner than other types of funding products, it’s worth it in the end. Once the application is approved, funds can be deposited into your bank account in as fast as 7 days. SBA loans are known as the best possible small business loan on the market. Ultimately, the savings will be worth your time.