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SBA Loans Overview

Get great rates, long repayment terms, and low monthly payments with SBA loans.

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Only takes 5 minutes and doesn't impact your credit score1

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SmartBiz is on your side

When it comes to small business financing, SmartBiz is on your side. We've taken the long, complicated process of applying for an SBA loan and made it more manageable through our streamlined application process and dedicated team. Our experienced financial professionals are with you every step of the way as you complete our online application and build your financial story. And if an SBA loan isn't the best option for you, we'll help you find the right loan for your business from our network of trusted banks and non-bank lenders.

SBA Loans: The basics

You might have heard SBA loans are one of the better options when it comes to small business loans. Funds from these loans can be used in a multitude of ways to help a small business. What exactly is an SBA loan? We'll go over the costs, qualifications, use of proceeds, and more to help you determine if this type of loan is the best option to fund your small business.

What is an SBA loan?
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An SBA loan is a government-guaranteed small business loan that has a long-term and a low-interest rate. The Small Business Administration (SBA) is the government agency that partially guarantees SBA loans and was founded in 1953 to support small business owners across the United States.

The most common misunderstanding about these loans is that the agency lends money directly to small businesses. However, the agency typically does not make direct loans. The SBA provides a guarantee on the loan, promising to reimburse the bank for a certain percentage of your loan if you default on that loan. This guarantee lowers the risks to banks and other lenders, encouraging them to offer these loans to more American small businesses. Many banks and other financial institutions offer SBA loans, but their process, requirements, and fees can vary.

What can you use your SBA Loan for?
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SBA 7(a) loans from $30,000 – $500,000 from banks in the SmartBiz network can be used for debt refinancing and working capital. Working capital includes operational expenses, marketing, hiring, etc. SBA loans can be used to fund new equipment purchases as well.

SBA 7(a) loans can also be used for refinancing existing business debt not secured by real estate (such as cash advances, business loans, and equipment leases).

SBA Paycheck Protection Program
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The SBA also provided up to $10 million in Paycheck Protection Program (PPP) Loans as a result of the CARES Act. These PPP loans were offered to help eligible small businesses struggling during the COVID-19 pandemic to keep employees on the payroll. Funds from these loans could be used to cover payroll costs, employee benefits, rent, utilities, and other approved costs. If these funds were used as designated, the loan could be forgiven. This program was supposed to end on June 30th, 2020, but is in the process to be extended to August 8, 2020. SmartBiz processed thousands of these PPP loans on behalf of the banks in our network.

Where can I apply for an SBA loan?
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In the not-so-distant past, small business owners had one option when looking to apply for an SBA loan—walking into a bank. However, many businesses might not know that while one bank may say 'no', another bank will say 'yes' to the same potential borrower. Technology can now help small businesses find an SBA loan provider online that is a good fit. In fact, SmartBiz has created the first online network of Preferred SBA lenders for small businesses. With multiple banks with varying credit requirements on our platform, we've been able to help many applicants successfully apply for an SBA loan who were initially rejected by their local banks. What's our secret? It's no mystery; our sophisticated software allows us to match borrowers with the lender most likely to approve and fund their loan. Rather than spending your time going from bank to bank, SmartBiz can help you successfully apply for a loan quickly and efficiently.

What SBA Loans cost
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How much is an SBA loan going to cost you? The news here is positive—it's tough to beat the low interest rates and long repayment terms for these loans. SBA loans tend to be the least expensive financing available to small business owners.

SBA loans come with different rates depending on the lender you work with; however, the SBA establishes the maximum amount that can be charged for these loans. For Debt Refinancing and working capital loans, this is a Variable rate of Prime Rate plus 2.75% to 4.75%.

Are there additional fees for SBA loans?
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As with other types of small business loans, there are several fees associated with SBA working capital loans offered through SmartBiz. The SBA does not require you to hire a referral or packaging agent to secure an SBA loan.

Documents required to apply for an SBA loan

The best strategy to follow before you apply for these loans is to be prepared. The following is a checklist of the most commonly collected documents.

Banks in the SmartBiz network require the previous three years of business and personal income tax returns.

A Personal Financial Statement is required from each individual owning 20% or more of the company.

Also known as an Income Statement, a Profit and Loss Statement measures a company's financial performance over a specific period of time. This statement includes all revenue and expenses over a given period.

This statement provides an overall financial snapshot of your small business. As an equation, it looks like: Assets = Liabilities + Equity. The two sides of the equation must balance out to equal each other.

Most banks require some type of collateral. For banks in the SmartBiz network, the collateral required depends on the SBA loan size. If you apply for a loan through a bank in the SmartBiz network for $30,000 to $350,000, a lien on business assets is required by the bank. This includes assets such as accounts receivable or inventory, as well as fixed assets such as new equipment purchased with loan proceeds or commercial real estate owned by the business. The value of these assets does not need to equal the loan amount you are requesting.

These can include entity and location documents such as business licenses, articles of incorporation, commercial leases, or franchise agreements.

The SmartBiz difference

Born in California after the 2008 financial crisis, SmartBiz Loans was created to give small business owners easier access to low-cost capital. Instead of walking into your local bank, working with them for several months, and ending up with a 'no,' SmartBiz streamlines and automates the loan application process to help businesses quickly get to a ‘yes.’ You can complete the online application process and get funded from the comfort of your own home or business.
 
How have we streamlined the process to help small business owners successfully apply for a low-cost SBA loan quickly? First of all, we're very clear about the documents you need to apply for an SBA loan provided by a bank in the SmartBiz network. If you have your paperwork in order, the process can move swiftly from prequalification to funding. Secondly, our online platform makes uploading documents and moving through the process a snap. We've greatly simplified the entire lending experience from end to end. Finally, we match borrowers with the bank that is most likely to approve and fund an SBA loan for your business. You won't waste time going from bank to bank, we help do that for you.
 
We believe an SBA loan is a great fit to help build most small businesses. If you're still not convinced, read what actual SmartBiz customers have to say on our TrustPilot page. You can also review interviews with real SmartBiz customers on the SmartBiz Small Business Blog . You'll discover we offer outstanding customer service to support business owners throughout the application process.

Learn more about SBA loans

SBA Loan Requirements

Find out which types of businesses can be eligible for an SBA loan from banks in the SmartBiz network. 

SBA Loan Approval

Learn about SBA loan guidelines and the approval process before applying to ensure a fast turnaround of your application.

SBA Loan Rates & Fees

Current interest rates, how they work, and other fees and costs associated with SBA loans.

SBA Use of Funds

How you can use SBA loan proceeds to save money and grow your small business.

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See if you pre-qualify without impacting your credit score.1

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1. We conduct a soft credit pull that will not affect your credit score. However, in processing your loan application, the lenders with whom we work will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and happens after your application is in the funding process and matched with a lender who is likely to fund your loan.