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Who Are The SBA Lenders?

So business is booming (or you’re making plans for it to be booming soon!) and you’re ready to take the leap and apply for a Small Business Association (SBA) loan.

Just like with any small business loan you might take out, it is important to review and get to know your potential SBA lenders.

First, let’s look at how SBA lenders work. SBA lenders are often banks or financing companies who provide financing and lending options to you, the small business owner. The loans these lenders make are guaranteed by the SBA in the event that anything goes wrong with the loan, which helps these lenders to take on more risky loans than they otherwise might–resulting in more favorable terms and better rates. Unlike many standard loans, SBA loans can be acquired with little to no collateral and can be utilized for a variety of small business purposes including, but not limited to, loans to purchase real estate and necessary business equipment (from bookshelves to backhoes), disaster loans to help rebuild in times of need, microloans for smaller needs, and general working capital loans. The SBA’s website contains lots of helpful information about these government-backed loans. The SBA lenders can also provide a lot of insight into your options.

Now let’s move to understanding who these SBA lenders are. SBA lenders are a group of screened and evaluated financial organizations who have completed an application to join the network, and have certain procedures they have to follow when working with the SBA. These organizations have a special interest in providing small business loans and love to see small businesses thrive, and these organizations have personally sought out wanting to participate in the program. These institutions include large national banks, regional banks, savings and loan organizations, credit unions, and other specialized lenders that comply with the SBA’s 7(a) and other loan programs. Interested lenders must meet certain criteria, including: have the ability to evaluate, process, close, service, and liquidate loans; be open to the public to make such loans; have continuing good character and reputation; and be supervised by an authority approved by the SBA.

If you want to work with an SBA lender, it’s easiest to go to the lender directly. There are a few online options for SBA Loans, but the SBA also has a great tool for you to search SBA Lenders near you.

SBA loans can be a great option for your business if you meet the criteria, given their more favorable terms and lower rates. It’s important to note, however, that the SBA loan requirements are more paperwork and a more time-intensive process. But if you have the extra time to spare, pursuing an SBA loan can help you secure more favorable financing.

Meredith Wood

Meredith Wood

Editor-in-Chief at Fundera
Meredith is Editor-in-Chief at Fundera. Specializing in financial advice for small business owners, Meredith is a current and past contributor to Yahoo!, Amex OPEN Forum, Fox Business, SCORE, AllBusiness and more.
Meredith Wood