By the end of the May 31, 2021 Wage Protection Program, many small business owners have been asking and thinking about other SBA loans, and it may be a good time to remember why SBA loans are. Interesting for small business owners, how to reduce lender risk and why it is important for a loan applicant.

Robert Blaney

In general, SBA-guaranteed loans are attractive to small business owners because they have longer contracts and lower repayment requirements than conventional loans. In addition, SBA-guaranteed loans do not have interest rates and balloon payments. The loans are made through a private lender and are secured by the SBA. That guarantee lowers the lender’s risk, allowing borrowers to approve credit where they otherwise cannot.

Small, for-profit businesses are eligible for SBA secured loans. Each loan is based on its own merits and requirements for the lender to extend the loan. As with any conventional loan product, SBA participating lenders assess the borrower’s ability to repay the loan. Credit score is a key indicator for the borrower’s credit history. Low scores are weak, and high scores are strengths. It is important to keep in mind that you have the option to “buy” lenders and get loan agreements that will benefit your business. In the same way, even if one lender rejects the loan, another lender may approve it. SBA works with a large network of lenders and therefore business owners have many options to include large traditional banks, regional banks and small community-based lenders. Your local SBA District office can give you a list of participating lenders in your area. You can also use the SBA online lender-related tool to connect with SBA-approved Community Development Financial Institutions (CDFIs) and micro lenders across the country at When many business owners are exploring their financial options, they find it helpful to consult with one of SBA’s business advisory resources partners. You can find a business consultant near you using our application tool at In any case, these partner consultants may be able to identify the lender, develop a strong loan package, or, if necessary, build or repair a loan. Like our partners, these consultants provide their services at low or no cost and are a great asset to any business owner looking to start or grow their business.

The application process is administered by the participating lender from start to finish. The exact paperwork and forms required will be determined by the lender. Generally, most lenders will ask for your business plan, tax returns and financial statements (or forecasts for a new company). Our SBA Small Business Consulting Partners, SCORE Association, Small Business Development Center or Women’s Business Center Consultants can help you prepare these documents and loan packages. These services are free of charge.

The most frequently asked question by the borrower is “How long does it take to apply for an SBA loan” or “How long does it take for applicants to receive financial support after approval?” The simple answer is what the bank is doing with the SBA and when they use their power of attorney to make a loan. If they use a power of attorney, they will generally accept SBA approval immediately. Although there is no guaranteed timeline, in general, borrowers report completing the entire process in two weeks to a month. Quick set-up often occurs with the SBA preferred lender, which is why it is important to work with them. When a lender has a preferred lender, the SBA has the authority to make final loan decisions on SBA-certified loans. Unauthorized lenders must submit to the SBA for direct approval, which may prolong the process and may be a matter of time.

Borrowers also often want to know the most common reason a SBA loan application was rejected. Often, it is due to inadequate or incomplete application information or behavioral issues such as criminal record or loss. It is important to remember that even with an SBA guarantee, the lender may require the borrower to pay an advance or additional guarantee, because SBA insurance does not eliminate the risk, it only reduces it. The exact terms required are based on the overall risk of the transaction. Always remember that personal guarantees also apply, and the borrower is obligated to pay.

To learn more about how SBA loans can benefit your small business, please join us for the monthly SBA Arizona Virtual Loan Clinic next Wednesday, August 4.Th 9 p.m. We will discuss financial options, general loan requirements and recommendations for preparing a successful loan application. No registration required. Webinar login information is available at

In addition to our website, please follow us on Twitter @sba_arizona See our resource guide at for more information.

Robert J. Blaney has served as director of the U.S. Small Business District of Arizona since 1998. His experience includes working as a federal agent, a police officer, an insurance broker, vice president, and a director for the late Congressman District. Jack Camp.

About American Small Business Administration

U.S. Small Business Administration makes American business dream come true. As the sole resource and voice for small businesses supported by the federal government, SBA provides entrepreneurs and small business owners the resources and support needed to start, grow or expand their operations. Accident. Provides extensive network of field offices and partner services with public and private organizations. To learn more, visit