Manage episode 275050494 series 2518941
Navigating the SBA loan program and application process can be complicated.
For starters, the entire SBA loan program, including borrower eligibility requirements and all policies and procedures, is governed by the SBA’s Standard Operating Procedures Manual also known as the SOP for short.
The SOP is a 400 page document filled with industry jargon and references. To make matters worse, it is regularly updated making it nearly impossible for an applicant to know everything necessary to successfully apply for an SBA loan on their own.
This begs the question, “Where should an applicant turn to prepare themselves to successfully apply for an SBA loan without wasting time, money and other precious resources?
Many applicants simply turn to their incumbent Bank. The benefits of working with an incumbent bank include familiarity, trust and rapport. The potential negatives include; the bank not being a respected SBA Lender, the bank not being the right fit; which may result in a bad experience or even worse a credit decline, and the bank not offering the lowest rates and fees for which the applicant qualifies.
An alternative many applicants choose is asking for lender referrals from their trusted advisor network. This option amounts to a crap shoot as most trusted advisors have little to no familiarity with the ins and outs of SBA lending.
The third option is hiring a trusted SBA Small Business Loan Broker. Many consumers are comfortable hiring a residential mortgage loan broker to finance the purchase or refinance of their primary residence and it should be the same for business owners and entrepreneurs who are in need of financing to purchase or refinance their owner user real estate and/or acquire a business.
The benefits of hiring an SBA loan broker include:
- Working with an expert who is proficient in the details of SBA financing
- Being matched with the right SBA lender from the start
- Having a trusted advisor who is on your team and can answer questions or give advice through the entire application process from start to funding
I want to warn you that not all loan brokers are created equal. Beware of any loan broker who doesn’t focus primarily on SBA loans, requires fees to be paid upfront, is not properly licensed, makes unsubstantiated guarantees or promises regarding interest rates and loan approval, and anyone who advises and/or encourages unlawful actions to get the deal done at any cost.
Now it’s time to talk about one SBA loan broker in particular, me, Ryan Smith. After all, I am the host of this podcast.
I choose to best serve my clients by aligning my goals with my client’s goals ensuring we are both proceeding with a common purpose for a common good.
I accomplish this by not charging an upfront fee. Instead I earn my commission only after the loan has been funded and my clients goals have been met. Even better, in most cases my commission is paid to me by the SBA lender with no additional our of pocket expense to my clients.
In addition, from the outset I expose potential obstacles and impediments to successfully completing the SBA loan application which dramatically decreases the likelihood of a dreaded last minute decline. Also, I structure the loan application to ensure borrower eligibility and compliance with all SBA policies and procedures and when possible, I will negotiate the lowest fees and rates for which my client qualifies.