SBA Loans

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What is an SBA Loan?

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The U.S. Small Business mission is to help Americans who have the desire and passion to be entrepreneurs start, build, and grow their businesses successfully. The Small Business Administration (SBA) is not the lender, but a government agency that provides business loan program guarantees of up to 85% of the amount provided through an SBA-approved lender.

The 3 main SBA programs provide financing that can be used for many purposes, such as working capital, equipment, and inventory refinancing debt.

It’s important to know that getting an SBA loan is NOT Easy. Make no mistake about it; getting an SBA backed program will require significant time, documentation, energy, and commitment to get funding for your business.

Who can qualify for an SBA Loan?

While the application and approval process may be complicated and lengthy, many businesses, including small and new ones, have a good chance of approval because of the nature of the program: to support the American entrepreneur.

So what is involved in getting an SBA loan? Your qualification often primarily hinges on your, as the business owner, personal credit. It is not the final decision maker, but it is a very important factor. This product is only for business owners with the strongest of credit and credit histories who do not need immediate financing.

You must be prepared and be able to put together a quality, thorough application that will require time, energy, attention, and documentation. This will ensure a speedy decision and approval, but you should still expect it to take weeks, not days.

How to Choose the Right SBA Loan Program

There are many different options out there. However, these three programs are considered to be the most popular:

  • The 7(a) Loan Program – The choice for businesses looking to access working capital or start up their business.
  • The Small Business Microloan Program – Through this program, the SBA works as a third party to loan money to an intermediary nonprofit lender. From those lenders, startups and small businesses receive small loans of up to $50,000 to run their company.
  • The CDC/504 Loan Program– This program provides long-term, fixed-interest rate financing to small businesses that are trying to expand or modernize.

How to Apply for an SBA Loan

Some application processes are simple and fast. That is definitely not the case with an SBA loan. The application is lengthy, the documentation required is thorough, and if you miss anything you have to start over again. To be sure you include all of the pieces that the SBA requires, here is a checklist of the areas that are considered by the SBA when your application is in the process of getting approved:

Business Plan

You must have a plan in writing that describes the intended use of the money you are requesting and the overall plan for the business. The SBA offers a free business plan guide to help you. It is recommended that you use their business plan or at least compare yours to the one that they provide to ensure you cover everything that they require. Even if yours is an incredibly detailed plan, if you are missing a piece that the SBA considers crucial, your loan application will be rejected and you will have to resubmit it.

The fast, convenient and straightforward way to get the money you need for your business – now! Get your Quote Today by filling out our simple form.

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Amount and Use of Funds

You must determine how much you are looking for, how you came up with that exact amount, and describe the use of the money needed for the business. Remember, it must be for a business purpose.  Spreadsheets are a great way to show each section of your funding needs and, using the formulas provided, ensure that your numbers are accurate.

Credit History

To put it simply, you MUST have a strong personal credit history for the SBA to consider you for approval.

Financial Statements and/or Projections

Depending on the type of program you are applying for, you will either have to provide financial projections for a start-up business or financial statements like tax returns, Profit and Loss, or balance sheets for established businesses.


Most lenders offering SBA loans require other assets that you must put up as collateral such as a home, financial accounts, inventory, or other property you own. This is not required for every loan, but it may come up in the application process and you should be prepared for it.

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Industry Experience

It is not required that you have industry experience, but it is helpful if you and/or your management have experience in the field. The SBA wants to know that their money is going toward someone who knows what they are doing and has a good chance of success.

Check out How to find the Best Small Business Loans to weigh all the benefits and evaluate the decision to get funding for your business.

Even with all of these pieces included in your application package, there is still no guarantee that you will get approved. However, knowing ahead of time what is required and taking the time to complete each section thoroughly and carefully will help reduce rejections due to incomplete sections and can speed up your approval.

Small business owner borrowers who need access to speedy cash have other avenues available to them that won’t require the thorough application process and long wait for approval that an SBA loan requires. So if you are looking for fast business financing, check with AdvancePoint Capital to see which programs will work better for your needs.

The fast, convenient and straightforward way to get the money you need for your business – now! Get your Quote Today by filling out our simple form.

Get Quote Now!

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* All loans made by either WebBank, an FDIC-insured Utah industrial bank, or Bank of the Internet Federal Bank, an FDIC-insured federally chartered thrift located in California. In connection with the loans, the Banks' underwriting conditions and terms apply.