SBA Lenders & SBA Banks - General Information

Closing of SBA Bank Loan
Howell, Michigan

2009 Closing
Office Building, Dallas Tx

2009, New Build, Closed
Loan, Buford, GA

SBA lenders are quarky, niche players. Most real SBA sources only do SBA loans and rarely do anything else. Likewise, most conventional banks don't dabble in SBA business loans as it's cumbersome and expensive for them to offer these loans as the amount of set up, reporting and direct costs to the Small Business Administration, for the banks, are high.

Also, there is a steep learning curve for most banks that are attempting to process, underwrite and close their first few hundred loans with the Small Business Administration. There is a complicated process for new lenders to adhere to, and not underwriting the file properly, could result in a closed loan, WITHOUT the SBA guarantee. Which is a very bad position for banks to be in.

SBA Lenders and SBA Banks

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For borrowers, you definitely don't want to be the new SBA banks "guinea pig." Have you heard of those nightmare SBA closings that take forever? 6 month to close? 9 months to close? Most of these horror stories are a result of lack of experience on the banks part. You, as the borrower have to make sure that the source you work with is very experienced within this sector.

In addition, there are different credentials that banks earn as a result of their performance with the SBA. All new banks have to have their loan underwritten a second time by the SBA staff to make sure it was done properly. As you can imagine, having to go through the banks underwriting department, than through the SBA's is a huge waste of time. This can easily double the underwriting process. Bottomline, you need to work with the right SBA lenders, that have the best credentials and therefore your loan will only have to be underwriten once.

SBA Lenders Are NOT Created Equally

There is a WIDE range of what one seasoned SBA lender will consider "fundable" versus another. Think of it this way, almost every transaction we close has been declined by at least 5 other banks...

What separates one bank from the next is often their adversion to risk. Or, sometimes they know a certain business category better than others, so they are able to get past issues that other banks can not. That's why you see some banks focus on categories like hotel loans or restaurant loans, etc. Or, their underwriting guidelines are different. This can get very technical, but for example, some lenders will have set minimum personal expense standards. No matter what your lifestyle and even if you have no personal expenses, they say you spend $50,000 per year, for underwriting. Others will, for example, double personal expenses that show up on the borrowers credit report. Some will increase the personal expenses by a set amount, say $20,000 per year.

The point is that 10 SBA bankscan look at the same request and come up with their own different conclusions on the file. So, if your business is doing ok, you should be able to find a bank or lender that will fund your request. The trick of course is finding them, and presenting/packaging your loan request in the most favorable way. We are now offer for sale our internal commercial lender list , which includes SBA, USDA and conventional lenders. The sources on this list are still very much active and it should be a major time saver for you as you will only be submitting your loan to viable sources.

What we do is SBA loans from $400,000 and up. We do both SBA 7a loans and USDA B & I loans. Most of our transactions have commercial real estate as the collateral. But we often roll into these loans, equipment, working capital, and debt consolidation. No start ups at this time. Ffll out the pre approval form now to get started.

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