Applying for an SBA Loan

Preparation is key in making sure you put your best foot forward on your SBA loan application – find out more about the steps and process of applying for and getting an SBA loan.


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Published: May 09, 2014


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If you currently own a small business or planning to start one, you've no doubt heard about SBA loans. You probably know that they're business loans that are guaranteed by the U.S. Small Business Administration. You may also be wondering about the actual process of getting an SBA loan.

Hi, I'm Chris Ledesma with Wells Fargo's SBA team.

As the nation's largest SBA 7(a) lender in dollar volume since 2009, we've extended thousands of SBA loans. So, today I'd like to help you understand how to take advantage of this program.

The best tip I can give you is this: A knowledgeable banking team can make securing a loan as simple and as easy as possible.

At Wells Fargo, our goal is to help guide you through every step of the process so you have a positive experience. We have trained people, resources, and a lot of experience to make that happen.

Now, let's get started with a walk-through of the SBA loan process.

Step one is the application process, in which you complete and collect all the application paperwork and the required documentation. Step two is the underwriting process, when the bank analyzes your application and makes a decision. And step three is the closing process, when you supply the final documentation, pay closing costs and fees, and seal the deal. Once closed, that's when you receive the funds.

Now, let's take a look at each of these steps.

Before you apply, it's a good idea to talk to an SBA loan officer at a bank to review the different programs and decide which one best meets your needs. You'll then work together to complete your application package.

What's in the package? In addition to the application forms, you'll need to supply financial information about yourself and your business. At a minimum, expect to provide three years of business and personal tax returns, as well as updated financial statements.

Now, you may have heard that the SBA program has more documentation requirements than for regular loans. Depending on your loan request, additional documents may be needed.

These rules are in place to make sure all lenders follow consistent credit practices, and they may add some extra effort. Your loan officer will know exactly what's required and help you get it all together.

Here are some tips to streamline this step.

Let your loan officer help you. This person is your experienced guide throughout the process, so don't be afraid to ask questions. Double-check to make sure all your forms are complete with original signatures, and preferably in blue ink. Work with your team. Get any partners, co-borrowers, guarantors, or key managers onboard early, especially your bookkeeper, CPA, insurance agent, or your attorney. And get a head start on gathering the documents you may need in the underwriting and closing steps.

Once everything is ready, your loan package goes to an underwriter who analyzes your application and makes the decision.

What are they looking for? That's many people's number one question and it's really pretty simple. The underwriter's job is to ask: Can your business with the new debt from the loan repay it on time?

To answer that question, they'll review your credit application, analyze all the financial information you provided. They'll work with you and your loan officer to do all they can to make sure everything is ready for the next step. Often, there are follow-up questions, so expect a phone call and be ready to fill them in. These folks are here to help you get your loan application reviewed and decision as quickly as possible.

If the underwriters approve your request, the next call will be about your commitment letter. This commitment letter outlines the conditional loan approval, including structure, collateral requirements, and terms. Your interest rate and payments. An estimate of the total down payment, deposits and fees, and when they're due. And final documentation needed for closing, such as Articles of Incorporation and other similar documents, signed purchase agreements or contracts, and evidence of your down payment.

Here are some tips for you during the underwriting process.

Give the underwriter the best times and number to call you. Be proactive to clarify issues or questions. When it comes to information, remember, more is always better. Ask about the closing requirements and time frames, and be ready to pay initial fees or deposits. Then sign and return your commitment letter as soon as possible.

If your application is not approved, we'd encourage you to work with your banker to consider alternative solutions.

Once you return the commitment letter, you're on to the final step, closing your loan. At this point, your loan will be assigned to a loan closing officer who coordinates the process from here, and will keep you informed along the way. You also get a closing checklist, or a needs list, of all the documentation required to close your loan.

The last hurdle is the actual closing. Your closing officer will work with a third party title company, closing agent, or attorney, to coordinate your closing. You'll also receive a final tally of the funds you'll need for any closing costs and fees.

Once you sign the final loan documents, the loan is considered closed and the funds are dispersed to the appropriate parties. Congratulations.

Here are some tips for this final step.

Be sure to provide all the items on your closing checklist in a timely manner. Your loan can't close without them. Ask your closing officer about any down payment documentation required, and have this ready early in the process. Make sure copies of any corporate articles or permits have the appropriate state filing or city approval stamps. Plan ahead for the certified check and other funds you'll need for the down payment and final closing costs.

And finally, make sure all the required parties attend the closing, including co-borrowers and guarantors. Again, your loan closing officer will outline this for you well in advance.

This might seem like a lot of effort, and sometimes it can be, but it's the banker's job to get you through the process as smoothly as possible. And with Wells Fargo on your side, you can be sure your banker's have the SBA expertise to ensure a positive loan experience.

Thanks for visiting the Wells Fargo Works for Small Business site. Be sure to check out our video entitled, “Expand your Opportunities: Get to know the SBA loan programs." You can also view other videos on how to build a strong credit profile and apply for credit.

To learn more about how Wells Fargo business banking could help you, visit

Thanks for watching, and we wish you continued success.

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