How to Apply for an SBA 7(a) Loan
Key Takeaways
- Know the steps and get your paperwork ready: Applying for an SBA 7(a) loan is a process similar to other business loans. Start by identifying what your business needs funds for, check your credit history, compare lenders, and then collect important documents. This includes tax returns, financial statements, business licenses, a business plan (especially if you're new) and information about owners. Once that's all organized, submit your application with your lender's help.
- Down payment and lender choice matters: How much you need to contribute toward your loan (equity or down payment) is usually up to the lender. But if you're looking to get funding for a startup, buying a business, or a partner buyout, the SBA requires you to put in at least 10% of the loan amount. Working with an experienced lender, like WaFd Bank, can make the process smoother because they're familiar with SBA requirements.
- Be prepared for timeline expectations: Once you've submitted a complete application, the process usually takes 60-90 days to get to the funding step. How fast this happens depends (in a big way) on how quickly you and any business partners respond to follow up questions and provide any requested information.
With so much information out there, it's difficult to know where to begin. At WaFd Bank, there are several application paths to choose from, depending on the size and type of SBA 7(a) loan you need, as well as SBA 7(a) loan uses. Read on for answers to common questions as you navigate the process.
How Can You Get an SBA Loan?
The application process for an SBA 7(a) loan is similar to that for a regular business loan or line of credit. Your business banker can guide you through the process and answer any questions you might have! In a nutshell, the steps to getting an SBA loan are:
- Determine your lending needs
- Review your credit history
- Research banks and possibly get quotes
- Gather documents; you may need to provide this and other information:
- Business plan, if your business is new
- 2-3 years of tax returns, potentially both personal and business
- Personal financial statement
- Financial statements such as a current balance sheet, profit and loss statement, and current and historical cash flow statements
- Bank statements from the past 6-12 months if you are applying where you do not have business bank accounts
- Legal documents such as your business license, registration, and any relevant legal contracts and documents
- Collateral, such as property or equipment, if required to secure the loan
- Social Security numbers of anyone who owns 20-25% or more of the business, depending on the business type and lender
- Submit your application
How Much Do You Have to Put Down on an SBA 7(a) Loan?
In most cases, it's up to your lender to decide how much equity, or down payment, to put down on an SBA 7(a) loan. The exception is that the SBA requires at least 10% for any applications involving a startup, a business acquisition, or a partner buyout.
What Banks Do SBA 7(a) Loans?
You might be surprised how many banks offer SBA 7(a) loans, but check to see if they are a preferred lender and what their program looks like. WaFd Bank offers a comprehensive approach to its SBA lending program, offering SBA 7(a) loans ranging from $2,500 to $5,000,000 and everything in between.
How Long Does It Take to Get Approved for an SBA 7(a) Loan?
Generally, it takes approximately 60 to 90 days from the time you submit a completed application to the closing and funding stage. Several factors can impact the timeline, including your responsiveness as the business owner and that of anyone else who may own the business with you when answering questions and providing additional information as requested. A responsive applicant often leads to a shorter turnaround time.
WaFd Bank is Here to Help
Our knowledgeable business bankers are available to help you manage success and have the expertise to become a trusted advisor to you and your team. With products that grow with your business and comprehensive tools to seamlessly manage it all, WaFd Bank is built for business. After over 100 years, we know what it takes to help you succeed, from start to legacy. Visit your local branch or give us a call at 800-324-9375 to experience the difference WaFd Bank can make for you.
WaFd Bank is an SBA Preferred Lender in all nine Western states we serve including Washington, Oregon, Idaho, Nevada, New Mexico, Texas, California, Utah, and Arizona.
Loans subject to credit approval, terms and conditions may apply.
Content is provided for general informational purposes only and does not constitute legal, tax, financial, or business advice. Consult a qualified legal professional or specialist regarding your specific needs and circumstances.
