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Steps in the Life of an SBA Loan
This summary of the SBA loan process is designed to provide an overview of the basic steps involved in obtaining an SBA loan.
1. Small Business Owner prepares business plan
2. Small Business Owner meets with a lender
3. Small Business Owner completes loan application
4. Lender reviews loan application and performs credit analysis
5. Lender makes a decision on whether to approve the loan
6. If an SBA loan guaranty is desired (and Lender is not a delegated lender), Lender submits application to the SBA. (Delegated lenders may approve loans without SBA reviewing the loan application.)
7. SBA determines eligibility for an SBA guaranty, pulls credit report and analyzes the loan application to determine, among other things, the ability of the small business to repay the loan.
8. SBA indicates guaranty decision to the Lender
9. An SBA loan authorization is prepared which is an agreement between the SBA and the Lender as to the terms and conditions under which SBA will guaranty the loan.
10. Lender completes loan underwriting such as obtaining and reviewing appraisals, title work, environmental reports, etc.
11. Loan documents are prepared such as the note, collateral documents, personal guarantees, etc.
12. Upon satisfaction of all terms and conditions of the loan authorization, the loan is closed.
13. Lender completes steps to perfect security interest in collateral.
14. Loan funding occurs with disbursements of loan proceeds as approved in the loan authorization.
15. Lender services the loan throughout the term of the loan consistent with standard loan policies and practices including collection of payments, monitoring of financial performance, etc.
16. When loan is paid in full, note is marked paid and all liens of collateral are released.
17. Small business owner may obtain free counseling from SBA Resource Partners at the beginning of and at any time throughout the lending process