SBA loans are primarily business loans that are provided through private lenders such as banks or credit unions but are guaranteed by the Small Business Administration or SBA.

However, before applying for a SBA loan, there are certain aspects entrepreneurs and business owners should know about SBA loan processing.

1. In a way, SBA loans are primarily loans that involve the federal government requiring great amount of paperwork and documentation.
2. SBA loan approval is an elaborate process that takes almost a month or even longer to get the loan approved. Hence, these loans are not ideal in case one requires instant cash.
3. In case of SBA loans, the entire loan amount is not provided to the borrower as a single payment. Funds are released as part payments that may require the borrower to send purchase orders or invoices to the lender. Sometimes, the money is not directly provided to the borrower. Instead, the lender takes care of all the payments that have to be made to the vendor by issuing two-party checks to the borrower and the vendor.
4. Usually family members are included as business partners. In these situations, lenders might request the signature of the spouse, in case he/she is a minority partner in the venture.
5. Although SBA loans are guaranteed by the government, the borrower is required to pay a guaranty fee that can range from 1 percent to 3.5 percent. However, SBA prohibits lenders from levying charges such as processing fee, origination charges, application fee and brokerage charges.