Q: I am seeking an SBA loan and have been told by business associates to approach "preferred" SBA lenders only. I thought all SBA lenders were the same. What's the difference?
A: The biggest difference is speed. Preferred SBA lenders have garnered this designation from the SBA by proving they can originate, underwrite, approve and close a consistent amount of quality SBA loans. Because of their excellent track record, they're given full authority by the SBA to approve loans, which allows them to make decisions usually within a 24-hour period.
Preferred status comes only after the lender proves itself as a certified SBA lender. Certified lenders have only partial loan authority and must submit their loans to the SBA for final approval. With a three-day turnaround for the certified process, you can see why lenders work so hard to attain preferred status. That said, a certified lender can still outperform a preferred lender if it works with an experienced SBA staff.
The bottom line is to make sure the SBA loan officers at the lending institution know what they're doing. Ask friends, business associates and lenders for SBA officers' names and the dollar amount of loan volume they've generated. And call your local SBA office for referrals; they know who the real players are.
SBA loans take many people down the road to business success; just do your homework to make sure you have an enjoyable trip. To find your local SBA office, as well as certified and preferred lenders in your area, visit the SBA Web site at www.sba.gov/financing.
Doug Hood is a co-founder of Rainmaker Capital Corp., a capital acquisition consulting company in Cartersville, Georgia. Co-founder Marilea S. Hood contributed to this article. Send questions or anecdotes via e-mail to email@example.com.