Why Faster SBA Loan Processing Is Key to Competing with Fintech Lenders?

Rudhra

• 4 min read
A small business owner outside her shop standing at a crossroads whether to choose traditional lenders or Fintech companies.
Waiting months for SBA loans? Fintech uses document automation to get you funded in days.

Small business lending is a multi-trillion-dollar market, and traditional SBA lenders are losing ground to digital-first fintech lenders. Nearly 50% of U.S. small businesses do not receive all or part of the financing they seek even though they drive roughly 40% of U.S. GDP. 

In this funding gap, alternative lending platforms have surged by offering automated and digital processes. These competitors outpace banks with faster approvals and an online interface. In short, a fast, modern SBA process is no longer optional; it’s essential. 

1. Improve Speed and Efficiency 

Time is money in small-business lending. Traditional bank loans typically involve lengthy paperwork and underwriting.  Business bank loans “require a longer processing period” than online alternatives. Borrowers often wait for more than 30–60 days for SBA 7(a) or 504 approvals in the old model, which can force them to delay hiring or equipment purchases. By contrast, online fintech loans can be funded in days or even hours. It can fund approved loans in “as fast as 24 hours”, and the other data shows 50% of its PPP loans were under $13.5K and approved in about 4 hours. 

Banks that still rely on manual processes risk losing these borrowers. Speedy approval is especially critical for SMBs that lack deep cash reserves; many will pay for rapid funding rather than wait months.  

Accelerating SBA processing is not a luxury; it’s a competitive necessity.  

2. Reduce SBA Loan Abandonment During Borrower Onboarding 

Manual document collection is more than slow—it drives applicants away. The reason is friction and confusing processes, like juggling multiple portals and scattered checklists, lead to drop-offs during customer onboarding, where 90% of financial institutions report losing applicants due to friction, confusion, and lack of communication  

Borrowers juggle multiple portals and checklists, often uploading the same file twice. A missing signature or wrong document type can force a complete restart, causing many to abandon their SBA application before underwriting. 

Frustrated entrepreneurs then turn to alternative lending platforms with streamlined digital experiences, even at higher costs. Each abandoned application can cost lenders hundreds of lost revenues and increase overall pipeline risk. 

When they find a faster, easier option, they take it. 

3. Fintech Lending Platform vs Traditional SBA Lending  

Alternative lending platforms have redefined SMB financing. Online lenders leverage data and automation to underwrite loans quickly. These digital-first players not only approve faster, but they also adapt terms and automate documentation. Fed research notes that small banks approve a higher share of applicants than online lenders (82% vs. 71%) but ironically borrowers at online lenders report the lowest satisfaction (only 48% satisfied). This gap shows opportunity: if banks can match speed and improve the customer experience, they can reclaim business from fintechs. Indeed, banks that offer quicker processing and superior service can attract SMBs willing to pay premiums for speed. 

Traditional lenders can't compete with that unless they evolve. 

4. Retain Borrowers with Smart SBA Loan Onboarding Strategies 

The SBA offers one big advantage fintechs can't: low interest rates and government-backed security. For borrowers, that’s huge. 

But if the process is slow, many won't even get to the funding stage. They'll abandon the application, even if your rates are better. 

The opportunity is clear: SBA lenders must digitize the first 10 days of processing. That’s when most drop-offs happen. Automating document collection and borrower follow-ups can cut that time in half. 

Forward-thinking lenders are already taking action. They utilize portals to collect documents, set up automated reminders, and organize all borrower files within a central dashboard. 

That means faster underwriting, fewer errors, and better borrower experiences. The result? Higher closing rates and better retention. 

SBA compliance doesn’t have to mean slow. It just means being smart with your tools. 

5. How DocsNow Transforms Document Collection for SBA Lenders 

DocsNow is purpose-built to solve the number one bottleneck in SBA lending: fragmented document workflows. It combines automation, governance, and intelligent agents to help lenders move fast without compromising compliance. 

Here’s how DocsNow helps SBA lenders win: 

  • Automated Collection, Live Tracking: Borrowers receive a centralized, branded link to upload everything at once. Our system prevents uploading errors and flags incomplete submissions in real time. 
  • Automated Reminders & Expiry Alerts: Built-in reminders notify borrowers of missing files. DocsNow also flags soon-to-expire documents like tax returns or insurance certificates, ensuring files stay compliant throughout the lending lifecycle. 
  • Governance and Compliance: Role-based access, audit trails, and version control ensure your team remains aligned with SBA documentation guidelines and internal policies. 
  • DocsAI Agent, Your Digital Assistant: Our AI agent helps you summarize borrower files, extract key data points, and reduce manual review time. It also assists in identifying document inconsistencies and missing fields. 
  • Smart Checklists, Not Scattered Emails: Instead of a cluttered inbox, borrowers and staff use dynamic checklists that track document status in real time. No more back-and-forth—just structured, guided uploads. 
  • Customizable Onboarding Templates: Whether you're processing 7(a), 504, or other SBA loans, you can create branded templates tailored to each loan type, making onboarding consistent and professional. 
  • White-Labeled Borrower Portals: Provide a seamless experience with your branding, custom instructions, and embedded customer service tools. Your borrowers see your name, DocsNow runs quietly in the background. 
  • Track Progress with Ease: Both your team and borrowers can track where each document stands. Transparency keeps the process moving and reduces support for queries. 
  • Fast Onboarding, No IT Bottlenecks: DocsNow integrates easily and requires no complex infrastructure. Lenders can go live in days—not months—without needing dedicated IT resources. 

DocsNow isn’t just a tool. It’s your digital operations partner for faster closings, higher borrower satisfaction, and SBA-ready compliance.  

Key Takeaway: Streamline SBA Loan Processing 

The market is changing. Fast approvals, digital onboarding, and smooth document experiences aren't optional anymore; they're anticipated. 

SBA lenders who don't adapt will keep losing borrowers to non-bank fintechs. 

Fortunately, you don't have to rebuild your entire lending stack; just focus on improving the first 10 days. Start with documents. 

Streamline SBA Loan Processing Today, Reduce Borrower Churn, and Speed Up Approvals. Book a Demo Today