SBA loan lender

An SBA loan lender is a commercial lender that provides SBA-guaranteed loans to small businesses in their communities. SBA loan lenders are partners with the SBA that provide funding to borrowers in order to promote economic growth and job creation. The SBA backs these loans in order to reduce the risk to lenders, and make life easier for small businesses.

If the SBA does not lend the money, what do they do?
The main role of the SBA is to make lending easier for small businesses to obtain by making loans less risky to their partner lenders. The SBA provides the structure for the loans. They set up specific loan requirements, providing information for what a borrower must do in order to qualify for a loan. This specific structuring and eligibility requirements significantly lessen the risk of default, allowing the SBA to safely guarantee loans.

What do their partners do?

The SBA partners offer loans to specific small businesses and groups within the structure provided by the SBA. They loan to small businesses that fit eligibility requirements.In return to providing financing for specific small businesses, their loans are guaranteed to a certain percentage. If a borrower meets the requirements for eligibility set up by SBA, then the SBA will back their loan. This means that the lender has less risk, and is more likely to provide the financing and funding needed for the small business to survive.

SBA does not provide loans, they just back them, and then their partners provide the funding. In order to find an SBA certified lender, you will want to check the SBA website, at SBA.gov, and look through their existing database of partners, which consist of commercial and private sector lenders. Do a search for lenders in your state. You can search with the criteria of Loan Volume, or Proximity. Most SBA lenders prefer to lend locally. In addition, some lend more through SBA loan programs than others, knowing these stats, and finding the lender that best fits your needs can help you get better rates of approval.

SBA loan lenders are regulated in how much they can lend, what percentage the interest rates may be, and how long the loan may be made for. Some loans, such as ARC loans are designed as short term financing with no interest for six monts, and rates that are to be deferred for 18 months. The loan must be repaid within five years. Other loans, such as disaster recovery loans have caps on interest at 4% for borrowers who were unable to find financing elsewhere, and 8% for those who are eligible for private sector financing. These loans have a longer term, and are secure, long-term financing. Thus, SBA loans vary based on the program and borrower profile, to find the best loan and lender for your small business, browse the SBA.gov website to learn more about the various programs available.