Starting Your SBA 7(a) Application: What You Need to Know

Taylor was a small business owner with a dream to expand his small coffee shop into a community cornerstone. He had a vision for a bigger space, more staff, the ability to serve even more customers, and the capacity to roast his own coffee blends on site—but he knew he needed financial help to make it happen. 

He understood that securing a loan was crucial, but he didn’t know where to begin. With expert assistance from his financial institution, Taylor found clarity and guidance that pointed him towards an SBA 7(a) application. As an SBA Preferred Lending Partner, the team walked him through the application, simplified the requirements, and gave him the confidence to move forward. 

SBA 7(a) Application: Streamline the Process for Success 

Like Taylor, with determination and the right support, you can take the first step toward making your vision a reality. Whether you’re looking to expand your business, purchase new equipment, or invest in a new space, starting the SBA 7(a) loan application process can set you on the path to success. 

Before you apply for an SBA loan, preparation is key. Begin by connecting with a reputable financial institution. Together, they will help you understand the loan requirements and eligibility criteria, outline the necessary documents, walk you through an SBA 7(a) Loan Checklist, and provide a proactive approach that can streamline the process. 

Key Eligibility Criteria to Apply for an SBA 7(a) Loan 

To qualify for an SBA 7(a) loan, your business must meet specific criteria. Firstly, your business must operate for profit and fall within the SBA’s size standards. This typically means having fewer than 500 employees or less than $7.5 million in annual revenue. 

Additionally, you must demonstrate a need for the loan and use the proceeds for a sound business purpose. Your business should not have access to other financing options on reasonable terms. Lastly, you need to show good character, a strong credit history, and the ability to repay the loan. 

SBA 7(a) Loan Checklist: Step-by-Step Guide to the Application Process 

The SBA 7(a) application process can be broken down into several key steps. Use our SBA 7(a) Loan Checklist here to keep you on track: 

Gather Required Documents: 

• Business Plan 
• Financial Statements (Profit and Loss, Balance Sheets)
• Tax Returns (Personal and Business)
• Personal Financial Information (e.g., Credit Report, Assets, Liabilities) 

Discuss Required Forms with Your Lender: 

• Talk with your SBA-approved lender to confirm which forms you need to complete.
• Common Forms Include: 
  • Form 1919: SBA Borrower Information Form 
  • Form 413: Personal Financial Statement
• Ensure you understand how to fill them out and ask for clarification if needed. 

Submit Your Application:

• Provide your lender with your complete application and all required documents. 

Work with Your Lender:

• Respond promptly to any questions or requests for additional documentation.
• Maintain clear and consistent communication to ensure smooth progress.

Wait for SBA and Lender Approval: 

• Allow the lender to conduct due diligence and submit the package to the SBA.
• Stay available to provide clarification or further information as needed. 

Finalize the Loan:

• Once approved, review the loan terms carefully. 
• Sign the agreement and follow any final steps provided by your lender. 

Maximizing Your Chances for SBA 7(a) Approval 

To maximize your chances of an SBA 7(a) approval, focus on presenting a solid basis for your loan. Highlight your business’s strengths, such as a consistent financial track record, a robust business plan, and a clear strategy for using the loan funds. 

Additionally, maintain a good credit score and ensure your financial statements are accurate and reflective of your business’s health. Building a positive relationship with your lender can also be beneficial, as they can provide valuable insights and support that increase your chances for SBA 7(a) approval. 

Common Mistakes to Avoid with an SBA 7(a) Application 

Avoiding common mistakes can significantly improve your chances of a successful SBA 7(a) loan application. One frequent error is not providing complete or accurate information. Ensure all documents are up-to-date and thoroughly reviewed for accuracy before submission. 

Another common mistake is underestimating the importance of a detailed business plan. A comprehensive plan demonstrates your business’s viability and outlines how you will use the loan proceeds effectively. Lastly, failing to communicate promptly with your lender can lead to unnecessary delays. 

How Long Does It Take to Get Approved for an SBA 7(a) Loan? 

The approval timeline for an SBA 7(a) loan can vary depending on several factors. Factors such as the completeness of your application and the SBA’s processing time all play a role. 

Partnering with a Preferred Lender Program (PLP) designated lender can expedite the process. PLP lenders help reduce the time it takes to get your loan approved. 

Navigating the SBA 7(a) Loan Application 

Navigating the SBA 7(a) loan application process can be challenging, but working with a professional can make a significant difference. A PLP designated team has the expertise and experience to guide you through each step, ensuring your application is complete and accurate. 

Connect with a member of our team for support and let us help fuel the growth of your business.