SBA Loan Processing Time: Marathon or Sprint?

, | November 3, 2022 | By

Securing your first small business loan can fray your nerves if you don’t know what to expect. When you’re waiting on capital to fuel your business plans, the loan process may feel like it’s dragging along. On the other hand, if complicated application documents are stacking up, it can feel like there’s never enough time to pull the details together. 

So, how long does SBA loan processing time take? Should you expect a marathon or a sprint?

Chances are, your loan processing time will include periods of both. Here’s a look at what you can expect, so you can map out the best plan for your small business. 

Why SBA Loan Processing Times Feel Fast

Once you decide an SBA loan is right for you, your to-do list will fill up fast. That can make the early parts of the SBA loan process fly by. If you feel rushed because you’re excited about your business or deadlines are pressing down on you, it may feel like the hourglass is cascading. 

Here are a few tasks you’ll need to accomplish early on in the SBA loan process:


Pulling Together Documents

The more prepared you are going into your application, the smoother SBA loan processing will run. Before you apply, be sure to pull together your balance sheets, credit reports, profit and loss statements, business licenses, ownership documents, and tax returns. 


Assembling a Financial Team

Want to reduce stress and cut down on time-consuming back-and-forth communication? Tap into a team of experts. It’s a good idea to pull in accountants, attorneys, and the person who does your business’s books before you apply for an SBA loan. 


Writing a Business Plan

A business plan shows the bank you’ve thought through the financial details of your business and will be able to pay back your loan. If you have this important document ready before you start applying, it can speed up the whole process. 


Finding a Lender

Finding the right lender might be the most important step in the SBA loan process because your lender will guide you through the entire process and cut down the stress of navigating tasks on your own. That’s why it’s important to choose a lender who cares about your business’s success and is eager to work one-on-one with you. 


Filling Out an Application

Before you fill out any old loan application, make sure you’ve picked out the best type of SBA loan for your business. Your lender should be able to help you choose the right loan to reach your goals.

Why SBA Loan Processing Times Feel Slow

Once you’ve submitted your application, it can feel like SBA loan processing has slowed to a crawl. However, there are good reasons the process slows down after you pass on paperwork to your lender. 

Here’s what happens behind the scenes of a business loan:


1. Your Application Is Reviewed

During the application review process, your lender will look at your business situation. They’ll examine important documents, such as your credit score and business plan, to figure out if the loan is right for you. 


2. Underwriting Begins

Before your lender gives you the full go-ahead for an SBA loan, they’ll want to figure out how risky the loan is. During the underwriting stage, financial experts look at your business’ balance sheets, financial expectations, and your business environment. With all this info, they can pin down how much money—and what rates—fit your situation. 


3. Agreement Documents Are Drawn Up

Next, your lender will lay out the details for your loan in a formal commitment letter. This is a stage you won’t want to rush through because it’s your chance to examine your loan’s interest rate, repayment plan, total sum, and other critical details. 


4. Your Lender Closes the Loan 

When it’s loan closing time, you’ll be on the home stretch. Your lender will use this time to double-check details and tie up any loose ends. This final process usually takes a few weeks, but you may end up waiting a few additional weeks or even months, if issues pop up. 

Fast, Slow, or in Between, BNC Is Here to Help Anytime

As a business owner, you may feel like SBA loan processing is racing along or sputtering to a crawl. However, by knowing what to expect at each step, you’ll have everything you need to burn through the process as fast as possible—and secure a life-changing loan.

No matter where you are in the SBA loan process, we’re here to help. Our financial experts love seeing people like you succeed. It’s why we’ve put together a whole library of SBA tips, tricks, assistance, and more. 

Want to learn more secrets to locking in a business loan? Read our article, “5 Tips for Securing Business Loans.”

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