How to Apply for an SBA Loan Successfully: Step-by-Step Guide

For small businesses, obtaining an SBA loan is one of the best ways to secure affordable financing for growth, expansion, or working capital. However, the process can be daunting if you’re unfamiliar with the steps involved. In this blog, we’ll break down the process and explain everything you need to know about successfully applying for an SBA loan.

Through its partnership with credit unions, CBS specializes in SBA 7(a) loans. These loans provide small businesses with flexible, low-cost financing, making it easier to access the capital they need to grow.

1. Choose the Right SBA Loan for Your Needs

The first step in applying for an SBA loan is selecting the loan that aligns with your business needs. Here’s a breakdown of the most common options:

• SBA 7(a) Loan Program: The most versatile option, allowing you to use funds for working capital, equipment, and even real estate. CBS credit unions offer 7(a) loans, which can provide up to $5 million for small businesses and terms up to 25 years.
• CDC/504 Loan Program: This loan is tailored for long-term investments like purchasing real estate or major equipment. It's ideal for business owners who are expanding or upgrading their operations. The credit union works with the business owner and a local Certified Development Center (“CDC”) to structure loans with fixed interest rates and longer terms.
• SBA Microloan Program: A great option for startups or small businesses, microloans provide up to $50,000 for working capital or equipment purchases.

Choosing the right loan depends on your specific business goals. For instance, a 7(a) loan is highly flexible, while a 504 loan is best suited for large-scale investments.

2. Determine if You Qualify for an SBA Loan

You’ll need to meet specific criteria to qualify for an SBA loan. These include:

• Your business must be for-profit and based in the U.S.
• Your business must qualify as small under SBA guidelines.
• You need to show a genuine need for financing and explain how the loan will be used.
• You must have sought alternative funding before applying for an SBA loan.
• You need to demonstrate that you’re creditworthy and have the ability to repay the loan.
• You must not be delinquent on any existing government loans.

If you meet these qualifications, you’re well-positioned to apply for an SBA loan. CBS and its credit unions work closely with businesses to ensure they meet all the necessary criteria​.

3. Find an SBA Lender

Once you’re ready to proceed, it’s time to find an SBA-approved lender. There are a few ways to do this:

• Directly reach out to a bank or credit union that offers SBA loans. Many credit unions, such as those partnered with CBS, specialize in SBA lending and can guide you through the process​.
• Use the SBA Lender Match tool, which connects you with approved lenders based on your business needs. This can be particularly useful if you’re unsure which institution to approach.

Choosing a lender familiar with SBA processes will help you smoothly navigate the complexities of your loan application smoothly.

4. Prepare Your SBA Loan Application

To apply for an SBA loan, you’ll need to submit a variety of documents. These include:

• SBA-specific forms, such as Form 1919 (Loan Application), Form 912 (Criminal History), and Form 413 (Personal Financial Statement).
• Business financial statements, such as your profit and loss statement, balance sheet, and cash flow projections.
• Supporting documentation, including your business plan, licenses, and leases.
• Credit reports for your business and personal finances, as your lender will evaluate your creditworthiness.

CBS credit unions utilize platforms like Creditable, which allows you to upload your documents and submit your application online, making the process more efficient​.

5. Submit Your SBA Loan Application Package

Once your application is complete, submit it to your lender. Here’s what happens next:

1. The lender will review and underwrite your application.
2. They may request additional documentation during the review process.
3. If approved, your lender will submit your application to the SBA for final review.

Once the SBA approves your loan, you’ll receive an initial commitment outlining the terms. From there, you’ll move into the closing process, which can take a few weeks to a month, depending on the size and complexity of the loan.

Conclusion: Take the Next Step Toward an SBA Loan

Applying for an SBA loan doesn’t have to be complicated. With the right lender, like CBS credit unions, you can navigate the process smoothly and secure the funding your business needs. Whether looking for a 7(a) loan to cover working capital or a 504 loan for major real estate purchases, the SBA offers flexible solutions that make it easier to grow your business.

Ready to start your SBA loan application? Contact CBS today or explore their online application portal through Creditable. Your business’s next stage of growth could be just a few steps away.