What is an SBA Preferred Lender?
You have probably heard the phrase 'it takes money to make money,' which definitely applies to running a small business. Launching a startup and keeping an existing company moving forward requires money. These are times when small business loans can be a tremendous help. Small Business Administration (SBA) loans have long been a viable option for entrepreneurs needing long-term fixed assets, operating capital funding, and debt refinancing.
The SBA does not provide the funds; it works with participating lenders throughout the United States that structure and deliver SBA-backed loan products, such as SBA 7(a) and SBA 504 loans. In addition to traditional SBA lenders, there are SBA Preferred Lenders. This Ameris Bank blog article explains what an SBA Preferred Lender is and what differentiates it from a traditional SBA lender.
SBA Preferred Lender Program overview
The SBA established its Preferred Lender Program (PLP) to give select lenders greater authority to service most aspects of SBA-guaranteed loans in-house, which can accelerate the process from start to finish. Lenders with PLP status can make credit decisions and review and administer SBA loan applications instead of sending them to the Small Business Administration for approval.
Choosing an SBA Preferred Lender might work to your advantage if you seek an SBA loan for your company and want to reduce the time it takes to receive funding. Preferred Lenders have a proven track record of getting small business owners the funds they requested in a timely manner because they complete the majority of behind-the-scenes work before sending the loan package to the SBA. So, if you need long-term funding for a time-sensitive business need or just want a quicker and more streamlined application and review process, consider working with a PLP lender.
How lenders achieve PLP status
SBA lenders that want to stand apart from the competition and offer their customers a faster and more efficient way to apply for - and secure - SBA funding hold the distinguished Preferred Lender Program status. There are two ways for a lender to be considered for PLP status. First, an SBA field office in the market area where the lender's headquarters or satellite office is located can nominate the lender. Second, the lender can directly contact an SBA field office and request to be evaluated for PLP status.
When evaluating a lender for potential PLP status, the SBA will take into consideration the following:
The lender's ability to process, close, and service SBA loans
The lender's processing volume and knowledge of SBA procedures and policies
The lender's overall SBA performance
Once a lender achieves PLP status, it is required to complete a stringent recertification process every two years. The SBA has a network of lenders throughout the United States that have achieved Preferred Lender status. Ameris Bank, for example, is a Preferred Lender based on its track record of success with the Small Business Administration and small business owners.
How to get an SBA loan
Suppose you are thinking about applying for an SBA loan. In that case, visiting the SBA website and becoming familiar with the various available loan programs and their general eligibility requirements is a good idea. This will help you select the best loan option for your needs. But, of course, you must also meet the borrowing requirements of the lender you choose.
When you decide on an SBA lender, perhaps one with PLP status, ensure you have all the required information and documents for your loan application. The reason is that the application process is very involved, and being prepared can ensure everything goes smoothly. Bank statements, profit and loss statements, business tax returns, personal tax returns, credit reports, and a business plan are some of the many documents you will need.
Working with an SBA Preferred Lender like Ameris Bank can be a great way to secure the funding you need for your small business. PLP lenders have SBA approval and authorization to approve SBA loan requests, which can reduce the time it takes to receive funding. In addition, PLP lenders have undergone a laborious review process to obtain the esteemed Preferred Lender status. As a result, you know you are working with a lender that has met or exceeded the SBA's requirements for lending excellence.
All loans subject to credit approval.
Published March 2023