What Is Fastest And Easiest Way To Get Approved For SBA Loans

What Is Fastest And Easiest Way To Get Approved For SBA Loans

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This BLOG On What Is Fastest And Easiest Way To Get Approved For SBA Loans Was UPDATED On February 17th, 2019

Small Business Administration Loans, also known as SBA loans, are for small business owners.

There are guidelines and requirements for a small business owner to qualify for SBA loans.

  • The creation of the Small Business Administration was in 1953 by the United States Congress
  • The SBA is a federal government agency which has been launched to assist millions of small business owners in getting the funding to run and operate their businesses
  • The Small Business Administration is not a mortgage lender and does not create or originate loans
  • The SBA’s role and function is to establish business lending guidelines and guarantee small business loans made by private small business lenders such as banks, mortgage companies, and investors
  • The SBA is somewhat like FHA
  • It guarantees the private business mortgage lenders against default as long as the mortgage loan is an SBA loan and meets SBA mortgage lending guidelines
  • The Small Business Administration makes small business lending possible
  • Otherwise, it would not have been possible for the small business owner
  • SBA is somewhat of a co-signer for small business owners seeking financing for their businesses

Small Business Loans: High-Risk Loans

What are high-risk loans

Most private lenders view small business loans as extremely high-risk loans.

  • Small businesses do not have the credit and capital as larger businesses
  • Most small business owners are mom and pop shop who are good at what they do
  • But are not business savvy in terms of getting lines of credit, outsourcing, or doing financial research analysis or market analysis like larger businesses and corporations do

SBA Loans: SBA Mortgage Lending Guidelines

  • SBA Loan borrowers need to try other private lending sources before applying for an SBA loan
  • The Small Business Administration wants you to try to get financing on your own via regular non SBA lending sources and if you get turned down, you will qualify for an SBA back business loan
  • SBA’s size minimum guidelines
  • Small business needs to meet SBA standards and guidelines set for particular businesses and industry with respect to sales, revenues, and amount of employees
  • SBA loans can normally be used for renovating the property the business is located, purchasing machinery and equipment, working capital, and other costs associated with running a business



1. 7 (a) SBA Loan: 

  • This SBA loan program is probably the most popular and commonly used SBA loan program by small business owners
  • The 7 (a) SBA loan program created to best used to help new businesses and existing small businesses when these businesses cannot get funds through traditional commercial lending channels
  • This type of SBA loan was named for the 7 ( a ) Section of the Small Business Act
  • This type of SBA loan is very flexible due to the fact that it can be used for numerous of reasons such as the following:
    • Acquisition of new equipment
    • Furniture, properties
    • Capital, inventory, reserves
    • Other purposes in operating and managing the day to day operations
  • Terms for this type of SBA loans are normally as follows:
    • 10 years for working capital
    • 25 years for fixed capital assets
  • The Small Business Administration’s cap for these loans is $1.50 million
  • The SBA normally backs up to 75% of a 7 ( a ) loan so the bottom line is that a small business owner can borrow up to $2.0 million from an SBA approved business lender

2. Certified Development Company/504 Loan Program

  • The CDC/504 SBA loan program offers business loans to small businesses with financing for the purchase of real estate or equipment such as the following:
    • Machinery to expand their businesses
    • Or to modernize their current business
  • A private mortgage lender will normally lend up to 50% of the business loan amount
  • A certified development company, which is a private not for profit organization which helps economic development will lend up to the additional 40% of the small business loan
  • And the SBA loan borrower will come up with 10%
  • A  SBA loan borrower needs to come up with a minimum of 10% of the equity
  • The borrower must contribute at least 10 percent equity
  • For those purchasing owner occupant real estate, they need to occupy 51% of the property and can lease the 49% out

3. Microloan Program

  • For small businesses needing smaller, short term business loans, the SBA Microloan program might be the perfect solution
  • These short term business loans are normally capped at $35,000 maximum loan amount

SBA Loan Application Process

To apply for an SBA loan, borrowers need to contact a commercial mortgage broker who handles SBA loans.  The commercial lender will have you complete a mortgage application, run credit, ask you for a detail business plan and what intentions are.

The following documents will be required:

  • Three-year tax returns ( business and personal )
  • Bank statements
  • Profit and loss
  • Financials
  • Personal financial statement

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