5 SBA Loan Mistakes That Make Lenders Want to Quit

October 10, 2025 | SBA Loans

Look, we get it. SBA loans are about as fun as watching paint dry in a hurricane. But if you're going to do this thing, let's at least do it right. Here are the five mistakes that make even the most patient lenders contemplate a career change to something less stressful—like bomb disposal.

1. Submitting an Incomplete Application (AKA "The Swiss Cheese Special")

This is the big kahuna of SBA loan mistakes. You know that feeling when you order a burger and they forget the patty? That's what lenders feel when you submit an application missing half the required documents.

The typical incomplete application includes:

Financial statements from 1987 (seriously, we've seen this)
A business plan that reads like a grocery list
Personal financial statements written in crayon
Tax returns? What tax returns?

The Fix: Use our SBA loan checklist (coming soon to LoanLink Prep) to make sure you have everything before you hit send. Your lender will thank you, and you might even get a faster approval.

2. The "I'll Figure It Out Later" Business Plan

We've seen business plans that are basically "Step 1: Get money. Step 2: ??? Step 3: Profit!" This isn't an episode of South Park, folks.

Your business plan should answer these questions:

What exactly does your business do? (And "make money" isn't specific enough)
Who are your customers, and why would they choose you over Netflix?
How will you actually make money? (This is important!)
What's your competition doing, and how will you do it better?

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3. Overestimating Your Cash Flow (The "Optimist's Curse")

Yes, you're going to be the next Amazon. We believe in you. But maybe don't project that you'll be making Jeff Bezos money in month two, okay?

Lenders have seen more unrealistic projections than a Hollywood studio. Be conservative with your estimates. It's better to under-promise and over-deliver than to promise the moon and deliver a rock.

4. Ignoring Your Personal Credit Score

Your personal credit score matters for SBA loans. A lot. If your credit score is lower than your golf handicap, you might want to work on that first.

Here's what lenders typically want to see:

Personal credit score of 680+ (higher is better)
No recent bankruptcies or foreclosures
Reasonable debt-to-income ratio
A history of paying bills on time (revolutionary concept, we know)

5. Not Understanding SBA Loan Requirements

SBA loans aren't for buying your cousin's motorcycle business or starting a cryptocurrency casino. There are specific requirements about what you can and can't do with SBA loan money.

Make sure your business and intended use of funds actually qualify for SBA financing before you spend weeks on an application that's doomed from the start.

The Bottom Line

Getting an SBA loan doesn't have to be a nightmare. It just requires preparation, realistic expectations, and maybe a little less optimism about becoming the next unicorn startup.