How Long Does It Take to Get a Business Loan?
Business owners look for financing options for many different reasons, including acquiring new equipment, inventory, or property or simply to maintain a positive cash flow to cover operating expenses. But how long does it take to get a business loan and secure the funding your small business needs?
Though the process can vary depending on the lender, loan type, and loan amount, there are some typical timeframes you can expect for most types of business financing. Keep reading for a closer look at small business loans, the usual period of time it may take to get a loan, and steps you can take to speed up the loan application process.
Business Loan Timeline
There are many different kinds of business loans and financing programs available, and each small business loan comes with its own application process and timeline. While some fast business loans offer funding the day you apply or within 24 hours, others, like Small Business Administration loans, can take weeks or even months.
If you opt for a traditional bank loan, for example, you may have to wait several weeks to get approved and receive the money. On the other hand, if you choose a merchant cash advance or invoice factoring to fund your business operations, you can generally expect approval and funding within a few days.
SBA Loan Timeline
SBA loans are popular because they typically offer lower rates and longer repayment terms than other loan options. However, approval can only be granted by an SBA-preferred lender, which can be a bank, credit union, or online lender.
Timelines for SBA loans depend on the lender and the type of SBA loan you choose. Some lenders state that they can get your SBA loan application approved and closed in about 45 days. Others claim the SBA loan process will take longer. If you require fast funding, an SBA loan most likely won’t be the best fit. The typical SBA loan application process is much slower. Approval and closing (when you’ll receive your funding) usually take about 45 days—though it can be longer. If you need fast funding, an SBA loan is most likely not the best fit.
What to Expect From the Loan Process
Now that you understand how long it may take to get a business loan, you may be wondering what’s involved in the approval and funding process. Just as with a personal loan or credit card, you’ll first need to fill out your chosen lender’s application, either online or in person. You’ll be asked to provide personal and financial details and attach documentation such as bank statements, business plans, and tax returns.
Once your application has been submitted, the underwriting process begins. The lender carefully reviews your personal and business credit profile to determine whether you’re a good candidate for a loan before approving you and to decide which interest rates and loan terms are the best fit.
Many lenders have an automated underwriting process that can accomplish this kind of review quickly. Other lenders will have a funding specialist manually review your application, which typically takes several days.
After you’re approved for financing, the lender will distribute your funds. If you choose direct deposit, you should see them in your bank account in as little as a few hours. Though not as common an option as it used to be, you can also receive funds via a mailed check or prepaid card, which can take a few days.
How to Speed Up the Business Loan Process
Although you can’t control every aspect of the business loan process, there are some things you can do to speed it up. If you need business funding as soon as possible, follow these steps.
1. Choose the Right Loan Type
Some types of loans are faster than others. A traditional business term loan or business line of credit will take longer than equipment financing or a merchant cash advance. If you have an urgent need for business funding, shop for loans from lenders known for quick approvals and funding. Just keep in mind that some forms of funding, like revenue-based financing or merchant cash advances, may cost you more in interest and fees.
They may also have shorter repayment terms—for some loans of these types, weekly or even daily payments may be required. You may also be offered a secured loan, which will require collateral such as your commercial property or company vehicle.
2. Apply on a Weekday
If you plan to apply for a small business loan in person, you may want to consider visiting your local bank branch during the week. Many small business owners have more availability on the weekends, so they tend to apply for business financing then, which can lead to long waits and possible delays in application processing.
If possible, try to fill out your in-person application during the week. The shortest wait times typically occur on Tuesdays through Thursdays. Business lenders won’t have as many applications to review and may get to yours sooner.
Don’t forget that online banking is always an option, and many online lenders offer small business loans with competitive interest rates and attractive repayment terms.
3. Prepare Financial Documents
Before you apply for a business loan, take the time to collect and review all the documents you’ll need to provide. These may include bank statements, tax returns, and a business plan. If you’re unsure which documents you need to apply, check out the lender’s website or reach out to them with any questions.
4. Answer Questions on Time
After you fill out a loan application, a lender may call or email you with questions. When they reach out with questions, be sure to answer them as quickly as possible. If you take days or weeks to get back to them, you’ll substantially delay the process.
5. Choose Direct Deposit
As long as you have a valid and active business bank account, you’re eligible for direct deposit, which most traditional and alternative lenders offer. Compared to checks and prepaid cards, which need to be printed and mailed, direct deposit is the fastest funding option. Note that you prefer it on your application.
Conclusion: Be Patient When Applying for a Small Business Loan
In a perfect world, you would be able to apply for a loan, get approved immediately, and receive your business funding shortly afterward. Since this is generally not the case, it’s important to be patient and do whatever you can to speed up the business loan process.
Since 2008, Samlend Financial has distributed $4 billion to 55,000 businesses. Click here or call (725) 247-3823 for more information on how Samlend Financial's working capital solutions can help your business thrive.
