How do I get a SBA loan?

Author

Ryan Chen
March 17, 2025

Hi there,

Welcome to my weekly newsletter. This is approximately a 4-minute read.

In today’s newsletter, we’re going to break down exactly how to get an SBA loan and what lenders are looking for.


We are going to go over…

  1. SBA loan types and eligibility

  2. Key approval requirements

  3. Application process breakdown

  4. Common reasons for denials & how to fix them

Schedule a FREE strategy session with us here (link) or apply here (link) for a business loan.

Actionable Tips

Know your DSCR (Debt Service Coverage Ratio). If your business makes $100K/year in profit and your loan payments will be $50K/year, your DSCR is 2.0x—lenders typically want 1.15x or higher.

SBA loans require documentation. Prepare tax returns, business financials, and personal financials before applying.

Most SBA loans require a 10%–30% down payment. Be prepared with cash reserves, or use creative financing like seller financing.

Best Link

👁 Credit Report Course Here

Check out this free credit repair guide that’s better than most $500 companies (link)

💰 Loancater’s Application

Get the best business loan in the market here (link)

✔ Clients Who Worked With Us In The Past

See previous business owners who were happy to work with Loancater (link)

⭐ Different Types Of Loans

Type of funding product available in the market (link)

SBA loan types and eligibility

  • SBA 7(a) Loan – The most flexible SBA loan (up to $5M). Used for working capital, refinancing debt, or purchasing a business, real estate, or equipment.

  • SBA 504 Loan – Best for real estate and equipment purchases. Offers low fixed interest rates with long repayment terms.

  • SBA Microloan – For startups or small businesses needing $500–$50K in funding.

  • SBA Disaster Loans – Used for businesses affected by natural disasters.

Key Approval Requirements

  • Credit Score: 680+ recommended.

  • Time in Business: 2+ years preferred, but startups can qualify with strong financials and collateral.

  • Revenue & Cash Flow: Business must demonstrate profitability or strong future projections.

  • Collateral: SBA loans often require some level of collateral, though 7(a) loans can be unsecured.

  • Debt Service Coverage Ratio (DSCR): Must be 1.15x or higher, meaning your business makes at least 15% more than its total debt obligations.

  • Down Payment: 10%–30% for business acquisitions and real estate purchases.

SBA Loan Application Process

Having a firm grasp on what goes on behind the scenes will give you clarity when applying. The last thing you want is to be banking your future on the SBA approval and not knowing what the process looks like so check out the below!

  1. Pre-Qualify – Determine eligibility based on credit, revenue, and financials.

  2. Gather Documents – Tax returns, financial statements, business plan, debt schedule.

  3. Apply with an SBA Lender – Choose a bank or alternative SBA lender.

  4. Loan Underwriting – The lender reviews your financials, DSCR, and business viability.

  5. Approval & Closing – Funds are disbursed after loan approval and signing.

Tip: Working with an SBA loan broker can increase approval odds and speed up the process.

Common Reasons for SBA Loan Denials & How to Fix Them

  1. Low Credit Score? Improve your credit profile or get a co-signer.

  2. Not Enough Revenue? Show strong financial projections and future contracts.

  3. High Debt-to-Income Ratio? Pay down some debt before applying.

  4. Lack of Collateral? Consider an SBA 7(a) loan up to 150k, which can be unsecured.

How I Can Help You

If you like this newsletter and want to work with me, there are a few ways we can do so:

  1. You can apply for a business loan here (link)

  2. You can apply for credit repair by emailing [email protected] “I want credit repair”

  3. You can apply for a free 30 minute strategy session for credit card processing & ACH  here (link)

Or,  you can reply to this email.

I reply to absolutely everyone.