For small business owners, credit access can be a critical resource to help them achieve their ambitions in many ways and potentially much faster. It can make a startup’s entrepreneurial dreams come true. Existing small businesses can benefit from borrowing funds intelligently with guidance from a trusted advisor, too. That capital can fuel expanded operations, support market-leading innovations, or assist in weathering periods of tight cash flows, seasonal ups and downs, or broader economic cycles.
Why SBA loans make more sense than ever
These days, with interest rates declining, it’s a good time for entrepreneurs to reassess their credit options, especially the various loan programs of the U.S. Small Business Administration (SBA). Such government-backed credit facilities are often an ideal starting point to gain valuable financial flexibility, which can be a lifeline when needed.
As a federal agency, the SBA’s funding resources are enormous: In the SBA fiscal year of 2024, which ended September 30th, the SBA approved over 76,000 7(a) and 504 loans combined totaling over $37 billion. During that time, TD Bank, an SBA Preferred Lender, made over 4,000 loans totaling over $660 million from the SBA’s flagship 7(a) and 504 loan programs.
This loan volume ranked* TD as #1 in our East Coast Maine-to-Florida market footprint in total SBA units and #2 nationally among all SBA lenders in total units. TD was also the #1 SBA lender in 7(a) units in Florida, South Carolina, New York, New Jersey, New Hampshire, Maine, Vermont, Eastern Pennsylvania, and the District of Columbia.
Three key advantages over conventional business loans
SBA loans offer a unique combination of flexibility, accessibility, and affordability that distinguishes them from traditional financing options. They are designed to bridge the gap for small businesses that may not qualify for conventional loans, offering terms and conditions that make credit more manageable. Key benefits include:
These features make SBA loans especially attractive for entrepreneurs. Common uses of SBA loans include:
Business acquisitions: With baby boomers retiring, many small businesses are changing hands. SBA loans can provide needed financing to acquire these businesses, preserving jobs and supporting local economies.
Franchise startups: Entrepreneurs seeking a turn-key business model often leverage SBA loans to launch franchise operations. The structured nature of franchises aligns well with SBA lending criteria.
Real estate purchases: For businesses looking to move from renting to owning their commercial space, SBA loans offer a pathway to stability. With longer terms and lower down payments, these loans make ownership accessible and allow businesses to build equity over time.
Refinancings: Recent SBA rule changes now permit refinancing of existing SBA loans and partial ownership transitions, broadening their utility and appeal.
What is an SBA Preferred Lender?
An SBA Preferred Lender, such as TD Bank, is a financial institution that the SBA has specifically authorized to make credit decisions on SBA loans without SBA approval. The SBA gives this designation to lenders who have shown a history of successfully processing and servicing SBA loans. It can simplify the loan application and underwriting process and potentially save small businesses weeks or months in getting their loans funded.
Addressing common SBA loan misconceptions
Many business owners may hesitate to pursue SBA loans due to outdated perceptions about government-backed lending. One common myth is that SBA loans take too long to process.
Before the 2008 financial crisis, SBA loans required a good deal more documentation than conventional loans. But, since then, bank regulations now require lenders making conventional loans to collect a lot more information and the gap in documentation has shrunk. In addition, working with an experienced SBA Preferred Lender can significantly streamline this part of the application process even more, potentially accelerating SBA funding by weeks or even months.
For many small business owners, the COVID-19 pandemic helped demystify SBA lending. Through programs like the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL), millions gained first-hand experience with SBA financing and discovered its accessibility and value.
Today’s SBA loan programs also offer improved accessibility and flexibility, catering to a wide range of needs and business types. From small working capital loans to multi-million-dollar real estate financing, these loans are no longer confined to specific industries or business sizes.
Navigating the SBA approval process successfully — and quickly
An SBA loan can be a great way for a small business to gain access to credit when qualifying for a traditional loan may not be possible or its payment terms not favorable.
Small business owners can benefit from working with lenders who understand their unique challenges and can provide tailored support. Experienced SBA lenders, such as ones like TD Bank who are part of the SBA's Preferred Lender Program, can help them navigate seemingly complex requirements and, when possible, accelerate the approval and funding. That’s because an SBA Preferred Lender has the authority to approve loans based on select criteria instead of going through the SBA for approval, which can potentially shorten the time between application and approval.
More information about SBA loan programs can be found at www.sba.gov. To find out more about the SBA loan programs from TD Bank, visit https://www.td.com/us/en/small-business/sba-loan-programs.
* Lenders ranked by the U.S. Small Business Administration (SBA) based on the SBA’s data for the units of loans approved during the period October 1, 2023 to September 30, 2024.
©2025 TD Bank N.A., Member FDIC | Equal Housing Lender | Loans and Lines of credit subject to credit approval. | Terms and conditions may apply. All rights reserved. The TD logo and other trademarks are owned by The Toronto-Dominion Bank and used under license.