Table of Contents
What Is an SBA Loan:
An SBA loan is money you borrow to grow your business. The cool part? The Small Business Administration (SBA) doesn’t give you the money directly. Instead, they promise to back part of the loan, so banks feel safer lending to you.
There Are 5 Popular SBA Loans:
SBA Loan | Max Amount | Use For | Speed |
7(a) | $5 million | Working capital, real estate, business purchase | Medium (30-60 days) |
504 | $5.5 million | Real estate, equipment | Slow (60-90 days) |
Express | $500,000 | Fast cash | Fast (36 hours for SBA decision) |
Microloan | $50,000 | Startups, inventory, marketing | Medium |
Disaster Loans (EIDL) | Varies | Recovery after natural disasters | Slow |
Fun Fact: Over 57,000 SBA 7(a) loans were approved in 2023, totaling $27.5 billion in funding.
📊 Source: SBA Lending Statistics 2023
Do I Qualify? SBA Loan Rules in 2025
Here’s a simple checklist. If you can say “yes” to these, you’re on the right track:
✔️ 1. You’re a U.S. Small Business
• You must operate in the United States.
• 100% ownership by U.S. citizens, U.S. nationals, or lawful permanent residents
• Your business must be for-profit.
• You must meet the SBA size standards (usually <500 employees or <$7.5M revenue per year, varies by industry).
🧠 Tip: Use the SBA Size Standards Tool to check if you’re considered “small.”
✔️ 2. You Have Good Credit (Personal & Business)
• Most lenders want your personal credit score to be 680 or higher.
• SBA lenders also check your SBSS score (a combo of your personal + business credit). You’ll need:
• 165 or higher for 7(a)
• Loans Below 165: If a loan application has an SBSS score below 165, it will be processed as a standard 7(a) loan or through the SBA Express program.
📊 [Source: SBA SOP 50 10 8
✔️ 3. You’ve Invested in Your Own Business
• New businesses usually need to put in at least 10% equity (like a down payment).
• SBA wants to see you have skin in the game.
✔️ 4. You Don’t Have Big Red Flags
• No recent bankruptcies
• No defaulted federal loans
• No felony convictions that involve fraud
✔️ 5. You’ve Tried Other Options
• The SBA has a “Credit Elsewhere Test” you may need to show that banks said “no” before coming to SBA lenders.
SBA Loan Document Checklist- What You Need to Apply
Think of this like your “loan backpack.” Here’s what to pack:
📝 Basic Forms
• SBA Form 1919 (borrower info)
• SBA Form 912 (if you have any criminal history)
💰 Personal Info
• Last 3 years of personal tax returns
• Resume
🏢 Business Info
• Business tax returns (3 years if available)
• Year-to-date profit & loss statement
• Balance sheet
• Cash flow projections-click this link to goto my video on how to create one
• Business license, lease agreement
• Business plan (especially if you’re a startup)
📊 Credit Reports
• Personal and business credit reports
• List of debts and monthly payments
🧱 Collateral
• Real estate, inventory, equipment (whatever you can offer as backup)
📦 Other
• Info on other owners (anyone with 20% or more ownership)
Pro Tips to Boost Your Approval Odds
🧠 1. Keep Your Books Clean
Messy numbers = loan denial. Keep your QuickBooks or accounting software up to date.
📉 2. Lower Your Debt-to-Income Ratio
Try to keep your business debt payments below 30–40% of your net income.
📈 3. Improve Your SBSS Score
Even if you don’t know your SBSS score, improving these will help:
• Pay vendors on time
• Separate personal and business credit
• Get a D-U-N-S number (from Dun & Bradstreet)
📝 4. Write a Killer Business Plan
Explain:
• What your business does
• How you’ll use the money
• How you’ll pay it back
🧑🤝🧑 5. Work With a Trusted SBA Lender
Find lenders who do a lot of SBA loans. They’re faster, smoother, and more forgiving with paperwork.
You can also try SBA Lender Match or your local credit union or community bank.
What If You Get Denied?
It’s not the end. Try these steps:
1. Ask why (get it in writing).
2. Fix what went wrong (score, cash flow, documents).
3. Apply again or work with a different lender.
4. Try a microloan (easier to qualify for).
5. Talk to your banker or mentor (they can help clean up your package).
FAQ: Quick Answers for SBA Loan Requirements
Q: What credit score do I need?
A: Most lenders want 640+ personal credit. Some fintech lenders go as low as 625.
Q: Can startups get SBA loans?
A: Yes—but you’ll need a great business plan, cash flow projections, and equity down payment (usually 10%).
Q: Can I get approved without collateral?
A: Yes! Collateral is great, but not required for loans under $50K. Most SBA lenders will still approve the loan, even if there is not sufficient collateral, because cashflow pays back loans…not collateral. Just be ready to sign a personal guarantee.
📌 Wrap-Up: Here’s What to Remember
SBA loans can feel confusing, but don’t give up! Here’s the cheat code:
• ✅ Know the rules (credit, paperwork, business size)
• ✅ Improve your odds (credit score, clean books, equity)
• ✅ Partner with a smart lender (not just a fast one)
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