by Debi Enders
It you prefer faster decisions and less paperwork, the answer is yes!
When you apply for an SBA-guaranteed loan through a preferred lender, you will use a streamlined loan process that requires less paperwork than is required of other lenders. While the SBA checks your loan eligibility, the preferred lender has the authority to make the final credit decision. That means you should get an answer on your loan application faster than if you went through a nonparticipating bank, which must send your application through to the SBA for final approval.
That extra step can add up to 10 days to the time you must wait for a decision.
SBA preferred lenders can do more than fast-track the loan process. Because these lenders typically make lots of SBA loans, they can be a good sounding board as you consider your options and an even better source of information as you complete your application.
And you can trust the information you receive. Before being awarded status as an SBA preferred lender, a financial institution must demonstrate a proficiency in processing and servicing SBA-guaranteed loans and have a strong record of success in working with the SBA.
Keep in mind that the bank, not the SBA, actually lends the funds for an SBA loan. Banks make these loans following SBA guidelines and then service them directly. Should the borrower default, the SBA guarantees repayment, enabling lenders to take slightly higher risks than they might otherwise.
The SBA offers a variety of loan programs for different small-business needs — and with interest rates and repayment terms that are typically better than small businesses might find elsewhere.
How do you know which is best for you? Ask an SBA Preferred Lender.
Debi Enders (debi.enders@commercebank.com) is vice president, small business banking at Commerce Bank.
Submitted 6 years 82 days ago