• Ali Abbas, Marketing Manager at US Business Funding


• 11.08.2022 12:30 pm
#loan #usbfund

Talking about starting a small business, you would need to get funding. From start-up costs to other expenditures, it is mandatory to have enough cash. However, not all people can fund their new venture directly. They require a dedicated loan that gets accepted ASAP, then starts the business. 

Here comes the SBA loan, which the government approves to fund start-up costs for small businesses. Furthermore, it helps expand your business, take care of other expenses, and buy a property. A private lender issues an SBA loan; however, the federal government supports the same. 

Know more about SBA loan 

SBA stands for Small Business Administration, a loan given to new ventures and small businesses in the USA. The federal government authorizes it to assist small businesses with funding and capital requirements. It is not an ordinary loan but a government-backed loan to help to fund start-ups. Here the government is not entitled to provide the loan directly; however, it backs the private lender or an institution. 

You need to provide assurance or a personal guarantee if you're applying for a small business loan. Such a guarantee makes your personal assets liable to hold if in case you are unable to repay the loan. 

SBA loan processing time - Factors to know

• As it is not an ordinary loan, the SBA loan processing time might take up to 90 days. Meanwhile, it depends on the loan amount and the lender who provides the loan. 

• Then comes the paperwork, which is a daunting and time-consuming task. It forms the main component of the SBA loan processing. 

• SBA loan considers the amount of money and the loan program you have applied for. 

• SBA loans are given based on the preferred lender program banks with a power of guarantee. 

SBA loan process 

New business owners who intend to get an SBA loan usually experience a different response. It is about how the loan is approved as the process goes down the line. How long does SBA loan take depends on the steps of the process.

• The loan application process is the first step where business owners conduct proper research. It includes finding the best loan based on their requirements, preparing the documents, and submitting the application. 

• SBA loan lender verifies the application along with the documents submitted. The underwriter checks a business's financial background, credibility, etc. 

• Then comes the approval and commitment part, which the lender does. As a small business owner, you must sign and accept the loan offer, closing the process. 

• The federal government authorizes the closing process of the SBA loan with a guarantee. You sign the final documents and receive funds in your bank account to use for business purposes. 

Five things to know before the SBA loan process begins

Applying for loans can be time-consuming and require too many formalities, procedures, and documentation. However, when it comes to SBA loans, one needs to focus on some critical points before the loan process begins. How long does SBA loan take depends on several factors, like bank lenders, etc. 

1. Mind your financial history 

Before you start applying for the SBA loan process, make sure to compile your financial history. It includes proceeds of your business plans, tax returns (personal and business), profit & loss statements, etc. With all of this kept handy, the SBA loan processing time can reduce, and the formalities can be done quickly. You would better see a CPA that can help you for closing the loan requirements. 

2. Keep business issues at bay 

Loan approval requires a clean record, and you should not hide any business issues. It might impact the loan approval process, and the lenders might see you as a defaulter. It is better to share things beforehand instead of getting into trouble at a later stage. If you're not sure of the process, it is best to consult experts like those at Kapitus on how to proceed in these cases. 

3. Got approval? the process isn't ended

The document-intensive step where the SBA loan approval process considers all formalities. You have received a formal loan approval, but the process is still on. You still have to share your business information with the SBA lenders - business operation location, valuation, tax information, and much more. 

4. Get in touch with banks known to your work nature

You will not waste time sharing information about the nature of your business. Connecting with a bank that knows your business industry beforehand is better. It becomes easier for them to understand, and approval can be quick. A preferred SBA lender is what you need who can make their own decisions. 

5. The loan closing date is the goal 

The loan closing process for approval is nearby; however, you must keep an eye out. Make sure you and the SBA loan lenders are on the same page; thus, the process finally approves your loan. 

The bottom line

Hope you have understood things and made arrangements for quick loan approval. However, some patience pays when it comes to the SBA loan process. Once it is done, you are good to go. With all the formalities done right, it is time to use the SBA loan to fund your small business