How to Get an SBA Loan for Small Business

Securing reliable funding is a big move for small business owners and entrepreneurs. Whether launching a new venture or expanding your operations, having the right financial support can be the difference between advancing your goals or hitting obstacles. Fortunately, SBA loans offer an affordable and accessible approach to fuel your growing business. But how do you get a SBA loan for small business? Here’s what you need to know about qualifying for an SBA loan and finding the right lender to support your small business.

What is an SBA Loan?

An SBA loan is a business loan backed by the United States Small Business Administration (SBA). These loans are specifically designed to help small businesses get financing that may be out of reach through standard lending options.

Different from a traditional small business loan, an SBA loan is government-supported, reducing the risk for lenders. With this added security, banks can offer small business owners better interest rates and repayment terms.

Key advantages of SBA Loans:

• Competitive small business loan rates
• Longer repayment periods of up to 25 years
• Smaller down payment requirements
• Flexible options for a variety of business needs, including purchasing equipment, hiring staff, and more

Whether you are a veteran transitioning to civilian life, an active-duty military spouse starting a business to support your family, or a longtime entrepreneur reaching new opportunities, SBA loans can provide the financial support you need to grow your business.

How to Get an SBA Loan

It’s important to understand what lenders are looking for and how to help your chances of SBA loan approval. Here’s what you need to do:

1. Check if You Qualify for an SBA Loan

Before you apply, make sure you meet the standard requirements for SBA small business loans.

• Business Type: The company must be for-profit and operating in the United States.
• Business Size: Your business needs to meet SBA size standards, which depend on the industry. Typically, this includes businesses with fewer than 500 employees or annual revenue under $7.5 million.
• Owner Investment: You must have personal financial stake your business, which contributes to your equity.
• Loan Necessity: SBA loans are for small businesses that can’t get funding on reasonable terms elsewhere.

• Financial Standing: Lenders evaluate your creditworthiness through your credit score and financial history to make sure you can repay the business loan.

2. Select the Best SBA Loan Program

Every business has unique financial needs, and the SBA offers different loan programs to provide the right support. Choose a loan program that aligns with your business goals.

• SBA 7(a) Loan: The most common type of SBA loan, offering flexible funding up to $5 million for various needs, including working capital and real estate purchases.

• SBA Express Loan: A faster lending option with a simplified approval process, providing up to $500,000.

• SBA 504 Loan: Ideal for purchasing equipment, land, buildings, or financing new construction. The loan is typically structured with 50% from a private lender, 40% from a Certified Development Company, and 10% from the borrower, though this may vary.
• SBA Microloan: Offers up to $50,000 to help startups and small businesses pay for inventory, equipment, or working capital needs.

• SBA Disaster Loans: This low-interest small business loan helps businesses recover from natural disasters—covering repairs, operating expenses, inventory, and more.

3. Choose the Right SBA-Approved Lender

To receive the SBA business loan, you need to partner with an SBA-approved lender. Not all lenders are the same, so take the time to compare interest rates, repayment terms, and fees to find the right match. Consider working with a family-owned bank for personalized support built for small businesses.

For help finding SBA lenders in your area, we suggest using resources like SBA Lender Match.

4. Gather Necessary Documents

If you want the application process to go smoothly, be sure to prepare your documents ahead of time:

• Program-Specific Requirements: Forms and applications tailored to the SBA loan program you are applying for.
• Business Documentation: Includes things like your business license, registration, and any other permits or certifications.
• Organizational Records: Formation papers such as articles of incorporation, bylaws, or operating agreements (for LLCs), along with any other documentation that verify your business structure.
• Financial Statements: Records of recent balance sheets, cash flow statements, year-to-date (YTD) profit and loss statements, and debt schedules.
• Tax Returns: Include both personal and business tax returns for the past 2-3 years.
• Business Plan: Outline your business goals, plan of operations, and financial projections for the next 2 years. Break down the first year month by month, then provide an annual projection for the second year.
• Personal Resumes: These are required for business owners and essential leadership members.

5. Apply for SBA Loan

The finish line is within reach! Submit your loan application along with the required documents. Stay in communication with your business lender while they review your application. They could need additional details or follow-up information.

If approved, carefully review the loan agreement. It’s important to understand the terms before signing.

6. Manage Your Business Funds Responsibly

Once you have secured your SBA loan, put the funds to work! Whether you purchase equipment, hire staff, or grow your business operations, be mindful of how you allocate the funds.

And don’t forget—stay on top of your payments to maximize your loan’s impact.

SBA Loans from Armed Forces Bank

SBA loans for small businesses aren’t just about funding—they help drive your business forward. While the process takes time, the right support can make all the difference.

Armed Forces Bank is a family-owned, full-service business bank, so we understand the unique needs of small business owners. With deep roots in serving both military and civilian clients, our commitment runs deeper than just providing financial services. We strive to be a trusted partner at every stage of your business.

Our military bank proudly offers some of the most popular SBA loan options, including the SBA 7(a) Loan, SBA 504 Loan, and SBA Express Loan. Choose the option that best fits your needs, and enjoy our competitive rates, flexible repayment terms, and personalized guidance to support your success.

Take the first step today! Explore SBA loan options or connect with our dedicated business lending team at SBALoans@afbank.com.