The Small Business Owner’s Guide: The SBA Loan Approval Process and Time Frames

| March 7, 2023 | By

When starting a small business, you need all the support you can get.

It can seem like you’re on your own as an entrepreneur, but that isn’t always the case. The Small Business Administration (SBA) provides small businesses with government-guaranteed loans that you can put toward getting operations off the ground, including by purchasing real estate, investing in the necessary equipment, or growing the team

These loans come with flexible terms and other advantages . But first, you need to get approved for a loan—and that can be daunting. 

At BNC National Bank, we prioritize providing practical information about often-complicated financial processes. Today, let’s demystify SBA loans. 

Here’s everything you need to know about SBA loan approvals, time frames, and more. 

The SBA Loan Approval Process and Time Frames

The time frames associated with SBA loans can vary widely, depending on several factors (such as the size of your loan and the thoroughness of your application documents). Knowing the various steps involved in the process—and what you can do to avoid lengthy delays!—can help. 

Here’s a general framework of the steps involved in the SBA loan approval process.  

1. Submitting Your Application

During this initial phase, borrowers compile all of the necessary documents and information, then submit it to the lender. Don’t overlook this step when considering timelines: gathering everything needed can take a while! However, this is also a step where you can do yourself a big favor by ensuring everything is complete and accurate. Your banking partners can provide you with detailed checklists of everything needed for your application before you officially submit it! 

2. The Proposal

Once the prospective borrower’s documents are in, the lender will review the application package. If applicable, the lender will provide a proposal letter that outlines all of the potential loan terms and conditions for you to review and accept. This isn’t an approval, just an understanding of what both parties are willing to do to move forward. The proposal step can take anywhere from a few days to a few weeks; it depends on how busy your lending partner is! 

3. Underwriting

In this step, the lender reviews the borrower’s financial information more thoroughly. This step includes repayment analysis from both the business and the person(s) involved. Because of the need for in-depth attention to detail during underwriting, this phase of the SBA loan process can take several weeks. 

4. Approving the Loan (if Applicable)

If the lender is going to approve the loan, they do so and notify everyone involved. They then work with the borrower to set up the loan. This can take from weeks to months, depending largely on how complex the loan is. Working with a smaller, more dedicated business loan banking team can ensure that you’re kept informed during this process and that it proceeds as smoothly and efficiently as possible. 

5. Closing the Loan (if Applicable)

Finally, the lender and borrower will work together to finalize their agreement, disburse the funds, and start repayment. This can take a few days or a few weeks. 

If you tally all of those time frames up, including each step, you could be looking at a few weeks or several months in terms of SBA loan acquisition! Interested in keeping that on the shorter end of the spectrum? That’s when partnering with a smaller bank can be helpful for you, your business, and your stress levels. 

The Perks That Small Business Banks Bring

Wondering why, specifically, small business banks can help you enjoy a more efficient SBA loan process? 

It all comes down to the care your business bank has for its community—and the time and resources its team has to share. We often see that selecting a small business bank as your SBA lender can come with several specific benefits, including: 

  • Personalized attention

  • Local knowledge

  • Flexible loan options

  • Faster loan processing

  • Strong community ties

  • Availability when you need support! 

It’s always good to know that when you call your bank for help, someone friendly and knowledgeable will pick up the phone. At BNC National Bank, that’s our goal!

Ready to Apply for an SBA Loan? Your Local Community Bank is Here to Help

Navigating the processes of applying for (and using, and repaying) an SBA loan can be overwhelming. That’s why it’s important to choose a lender that cares about your success and has the availability to provide the help you need.

At BNC National Bank, we have the expertise and experience necessary to help you support your business as it grows and thrives. Schedule a meeting with us at your earliest convenience, and we’ll discuss your SBA loan strategy. 

Are You Ready for an SBA Loan