Better Bank Loans: SBA Preferred Lenders Examined

SBA loans cannot be availed in any bank in the country. The Small Business Administration have an official lists of specific lending institutions designated as its preferred lenders to act as loan producers of its lending programs offered to small companies.

Characteristics of Preferred Lenders

Since SBA loans are guaranteed by the government, the agency imposes strict criteria for banks that wish to participate in its loan programs. SBA-certified lenders demonstrate satisfactory historical record with the SBA based on their lending system and services. It is a practice that is thoroughly observe because their re-certification as accredited lenders after the agreement term ends, depends on their past performances. They also establish outstanding capabilities to process, close, service and liquidate loans. Furthermore, the loan providers conform to the financing guidelines and policies administered by the SBA.

Selection Process

Before a lender becomes a certified lender for SBA loans, the bank requests and applies for the Preferred Lender Program in the agency's local field office. The application will be reviewed and forwarded to an SBA centralized loan processing center. The final decision is made by the Associate Administrator of Financial Assistance. Approved applicants are given 2 years to serve as preferred lenders and can reapply after the Supplemental Guarantee Agreement expires.