How Long Does It Take to Get a Business Loan?

Once you’ve decided that you need working capital for your business, you usually don’t want to wait long to get it.
Unfortunately, loan providers sometimes work on a different timeline than you. So it can be helpful to understand how long it takes to actually get a business loan―from the time you submit your loan application to the time you get your loan money.

In this guide, we’ll explain how long you should expect to wait for financing from different kinds of lenders and for different types of loans. We’ll also give you some advice on how to speed up the financing process―and point you toward some of the fastest lenders around.

So, just how long will it take you to get a business loan?

Anywhere between 15 minutes and several months.
Okay, we know that’s not a super helpful answer. But really, it depends a lot on what type of financing you’re getting and what lender you’re getting it from.

For example, let’s say you’re getting a business line of credit from Kabbage. In that case, you can get approved and funded in less time than it takes to get a pizza delivered. But if you’re applying for a commercial real estate loan from a traditional bank, the process can easily drag out to two months or more.
In other words, we can’t say exactly how long it will take you to get your business loan. But we can offer you some general guidance.

Before we get into that guidance, let’s make sure you’re up to speed on what actually goes into your loan approval and funding and why it takes as long as it does.

(If you already know how all this loan stuff works, feel free to skip to the next section.)

You can think of the financing process as having three parts:

1. Applying
2. Underwriting
3. Funding

The first part, applying, lies mostly in your hands. In this step, you usually have to fill out an application and submit some documentation (like tax returns, bank statements, and business plans).

Sometimes your lender will ask for more information or additional documents, which can slow things down. Some lenders also have a multiphase application, in which you initially apply online and then have to talk to someone on the phone. If you’re waiting for a phone call, things will take longer.

Once your application is in, it will have to go through underwriting. That just means that your lender is looking at everything to make sure you qualify for financing (and what loan amount and interest rate you qualify for). Some lenders offer automated underwriting that takes a few minutes, while others use manual underwriters that can easily take days.

If everything gets approved, it’s on to funding, in which your lender actually gives you the money. If they deposit funds into your bank account, this can take as little as a few hours. But if they send you a check, you may have to wait a few days for your mail to arrive.

Each step of this process can be affected by a number of factors. So let’s discuss those.

As we said above, we can’t tell you exactly how long it takes to get a business loan.

Technology has made the loan approval and funding processes much faster than they used to be. Many lenders (both online lenders and banks) now offer a loan turnaround of one week or less, and several offer shorter timelines than that.

But your loan timeline will depend on factors like these:

• The lender you choose
• The type of financing you want
• Your borrower qualifications
• How quickly you get documents together
• When you apply

The first two factors on that list usually have the biggest impact. So let’s talk about lenders and loan types.

Some kinds of lenders can get you a loan faster than others. For example, traditional lenders―banks and credit unions―can take longer than online lenders―also called alternative lenders―do.

One reason why? Banks often require you to apply at a branch. That means that you have to actually go somewhere rather than simply apply on your computer.

Plus, banks often offer larger loans that require more intense underwriting, thanks to the larger risk for the lender. Online lenders, on the other hand, often offer smaller loans and other financing types (like invoice factoring and merchant cash advances) that pose less risk for the lender. That means less intense, faster underwriting.

Of course, some banks can fund you quickly―and some online lenders take longer than others. Take lending marketplaces. These companies (like Lendio) shop around for loan offers for you, letting you compare potential loans.

So lending marketplaces can help you find a better deal than you’d get by applying to just one lender. But that matchmaking process takes some time―usually a few days―so lending marketplaces will take longer than direct lenders will.

In other words, you’ll often find the fastest funding times at direct online lenders. But remember, your lender type isn’t the only thing to think about.

It’s not just your lender type that matters, though. The type of financing you’re trying to get can make a big difference as well.

For example, merchant cash advances and invoice financing (a.ka. invoice factoring) can usually get funded very quickly. Why? There’s little risk for the lender, so you can get approved faster. Because with merchant cash advances, your lender automatically takes part of your credit card sales. And with invoice factoring, your lender can collect on the invoice if you fail to pay.

So with both types of working capital financing, the funding company can feel pretty confident they’ll get their money one way or another.

On the opposite end of the business financing spectrum, you’ve got commercial real estate loans and some equipment financing loans. These types of loans get secured by collateral (the real estate or equipment you’re buying), which means your lender can take your collateral if you fail to pay.

Since that’s their safety net, lenders want to be very sure that the collateral is worthwhile. That’s why real estate usually needs to go through an appraisal and an inspection. Of course, foreclosing or repossessing an asset is a hassle. So your lender will also want to be pretty sure you won’t default on a loan, which is why these loans often have a more extensive underwriting process.

Other types of financing, like term loans and lines of credit, usually fall somewhere in between.

Want to get a business loan ASAP? We get it. While you can’t control every step of the loan approval and funding process, you can do a few things to speed things up:

• Choose a lender with fast turnaround times.
• Submit your application on a weekday.
• Have documents (like bank statements and tax returns) ready to go.
• Promptly answer phone calls and emails from your lender.
• Choose to get your funds via wire or ACH transfer (not check).
• Have a business bank account for funds ready to go.

You may still have to wait longer than you like―but at least you won’t be responsible for any holdup.

Paycheck Protection Program (PPP) loans, or loans made possible by the CARES Act, are low-interest, forgivable loans to help businesses recover from COVID-19. Unfortunately, Paycheck Protection loan applications closed on August 8, 2020. It’s possible that the program will return, but it hasn’t happened yet.

If you were approved for a PPP loan, you could expect funding within 10 days. The PPP rollout was kind of a mess, though, so some borrowers got approved within a day or two while others reported waiting weeks.

EIDL loans are a type of SBA disaster loan, and they’re still available to businesses affected by coronavirus. SBA EIDL loans have low interest rates, but they’re not forgivable like PPP loans are.

The SBA says to expect a minimum turnaround time of 21 days on a disaster assistance loan―and potentially much longer. And note that SBA EIDL loans are one of the few loans you apply directly to the SBA to get.

SBA 7(a) loans offer flexible working capital for all sorts of needs, including equipment and real estate. The SBA turns 7(a) applications around in 5 to 10 days.

But the lender you apply with could add a lot of extra time―by both taking a while to submit your application and taking a while to fund you after you’re approved.

In fact, it’s not uncommon for the entire SBA loan process to take upwards of one month.

SBA Express loans are designed to be faster than other SBA loans. You can’t get nearly as much money as you could from other SBA loan programs (the maximum loan size is $350,000), but they also have a turnaround of 36 hours. Again, that doesn’t include the time your lender takes―but SBA Express loans still offer the fastest way to get SBA funding.

If you don’t need a large loan, an SBA microloan might work for you. These loans come in smaller sizes than other SBA loans (even smaller than SBA Express loans), but that doesn’t make them much faster. Don’t be shocked if it takes a month or more to get your SBA microloan.

You can use SBA 504 loans for equipment or for real estate. In either case, your 504 loan has to get approved by both the SBA and a local CDC (certified development company). That can make these loans take quite a while―easily a month or two.

When you’re getting a business loan, it’s best to plan ahead. Because sure, you may be able to get approved and funded all in one day, but it’s just as likely that you’ll have to wait a month or more.

Your funding timeline will depend on things like the lender you go with, the type of loan you’re getting, and other factors.

While you can’t control how long your lender takes, you can help move things along. Make sure you’re prepared with plenty of documentation, and stay in communication with your lender.

We hope you get your loan quickly!

Don’t have much time to wait? Check out our rankings of the best fast and easy business loans to see your fastest funding options.

Disclaimer

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.