How to Get a Business Loan (SBA and Bank Options)
SBA-backed loans help many small businesses that are already running. The government guarantees most of an SBA 7(a) loan (up to $5 million). This makes banks say yes to businesses they would otherwise refuse. Startups and businesses under 2 years old often use SBA microloans, credit unions, and online lenders instead.
At a glance
- Cost:
- SBA guarantee fees ~2–3.75% of the guaranteed portion; rates vary
- Total time:
- 2 weeks–3 months depending on loan type
- Steps:
- 7 steps
- Where to apply:
- sba.gov
Last reviewed October 2026 against official sources. Re-checked annually · next review due October 2027.
The Steps
Follow these in order
Each card shows the phase, expected time, and any cost. Data checked against official US sources(October 2026).
0 of 7 steps
- Before You Go 1–2 hours
Define the amount and the exact purpose
Lenders say no to vague requests. Say what the money is for. For example, "Working capital to cover inventory purchases through Q4" or "$80,000 of kitchen equipment" gets approved. "Growth money" does not. Tie your amount to a clear plan. Also tie it to a clear way to pay it back. That can be the money the loan helps you make. Or it can be cash flow you already have.
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- Before You Go 30 min
Check whether you clear the standard bar
Typical bank/SBA requirements are these. You need 640+ personal credit. SBA microloans can go lower. You need 2+ years in business. You need about $100k+ in sales each year. You must have no recent bankruptcies. If you are strong in one area, it can help if you are weak in another. For example, strong cash flow can help carry a 620 score. But startups under 2 years should look at microloans, credit unions, or the SBA Small Loan exception. They should not start with a standard 7(a).
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- Before You Go 1 hour
Match the loan type to the need
SBA 7(a): this is the general-purpose loan up to $5M. You can use it for working capital, equipment, real estate, or to refinance debt. Terms are 10-year (25 for real estate). Startups and ownership changes need at least ~10% down. You must give a personal guarantee. SBA microloan: up to $50,000 through nonprofit lenders. This is best for startups. Term loan: a fixed lump sum from a bank. Line of credit: you borrow and repay as needed. This helps with cash-flow gaps. Equipment financing: the equipment itself is the collateral. So approval is easier.
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- Go 1–2 hours
Find lenders through SBA Lender Match and locally
Use the Lender Match tool on SBA.gov to find SBA-approved lenders in your state and industry. Banks differ a lot in what they approve. Also try your own bank. A past relationship helps. Also try a local credit union. They are often the most flexible for small loans. Compare rates, guarantee fees, and collateral across at least three lenders.
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- Fill / Prepare 3–5 days
Assemble the full package
Put together a business plan that says how you will use the money. Add personal and business tax returns (2–3 years). Add a P&L and balance sheet. Add 12-month projections. Add bank statements. Add the personal financial statement. For an SBA 7(a) loan, the SBA asks for a personal guarantee from every 20%+ owner. You must give collateral if you have it. A complete package moves fast. An incomplete one can stall for months.
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- Submit & Pay 2–12 weeks
Apply, then respond to underwriting fast
Expect 2–4 weeks for a decision on bank loans. Expect 1–3 months for full SBA 7(a) processing. SBA Express is faster, but the cap is lower. The lender will ask follow-up questions. Answer the same day if you can. Businesses that do this close weeks earlier. If you get approved, read the full fee list before you sign. Also read what the personal guarantee covers.
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- Follow Up ongoing
Repay cleanly to build a banking track record
Pay your first business loan on time. This is how you get the second one faster and cheaper. Banks give higher limits to businesses with a proven payment history. They also ask for fewer papers. Keep business money in its own account. This keeps the record clean for next time.
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FAQ
Frequently Asked Questions
Can a startup get a business loan?
Rarely from banks. Most banks want 2 years of tax returns. Startups have other choices. You can try SBA microloans (up to $50,000 via nonprofit lenders). You can try equipment financing. The equipment is the collateral. You can try business credit cards. You can try revenue-based financing. You can also try SBA Community Advantage lenders. The pilot ended in 2023 and the SBA paused new program licenses in May 2025, so options are limited. For a business with no sales yet, the honest answer is often personal savings or friends & family. Or you can use an SBA loan backed by a very strong personal guarantee and outside income.
What exactly is an SBA loan?
The Small Business Administration does not lend money, except for disaster loans. It guarantees a large part of a loan made by a bank. That part is 85% for 7(a) loans up to $150,000 and 75% above that (the separate SBA Express program is guaranteed at 50%). So the bank takes less risk. It approves businesses it would otherwise say no to. You repay the bank. If you default, the SBA repays the bank. Then the SBA comes after you under your personal guarantee.
Do I need collateral and a personal guarantee?
For SBA 7(a) loans, every owner with 20%+ equity must give a personal guarantee. There are no exceptions. You must give collateral if you have it. That can be equipment, real estate, or receivables. The SBA will not say no just because collateral is weak, if other parts are strong. Online lenders may skip collateral. But they charge much higher rates for that risk.
What about PPP loans?
The Paycheck Protection Program stopped taking new applications on May 31, 2021. It is a closed program, not a current option. But its forgiveness window is still open: since March 2024, all borrowers, regardless of loan size, can use the SBA's direct forgiveness portal. Businesses that still hold EIDL loans manage them through the SBA's loan servicing portal. Those loans are no longer being issued either.
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