If you’ve ever experienced the frustration of waiting months for an SBA loan approval only to be met with a rejection, you’re not alone. The world of SBA business acquisition loans can be complex and time-consuming, especially if you're navigating it without the right guidance. However, there is a way to expedite the process and increase your chances of getting approved: working with expert SBA brokers.
Why SBA Loans Can Take So Long
The process of securing an SBA loan is often fraught with delays. Each bank that offers SBA loans may underwrite the loan differently, even though they all follow the same SBA Standard Operating Procedure (SOP). These differences can include varying credit score thresholds, different interpretations of financial documents, and distinct appetites for risk. This means that what might be a straightforward approval at one bank could be a lengthy and ultimately unsuccessful process at another.
As the speaker in the video points out, many people find themselves stuck in a months-long process with a bank that simply isn’t a good fit for their deal. The solution? Partnering with an expert who knows the ins and outs of the SBA loan process and has relationships with multiple banks.
How an SBA Broker Can Help
An SBA broker, like the one featured in the video, can be an invaluable resource in helping you secure your loan faster. Here’s how:
1. Identifying the Right Lenders
An experienced broker can quickly identify the top two or three banks or nonbank SBA lenders that are most likely to fund your deal. Since different banks have different criteria and specialties, having someone who knows which lenders are most likely to approve your specific deal can save you a lot of time and heartache.
2. Understanding and Navigating SBA Guidelines
SBA guidelines and lending appetites are constantly changing. A broker who is well-versed in these changes can help you structure your deal in a way that makes it more likely to be approved. Whether it’s a business startup, franchise, acquisition, or partner buyout, they can provide insights into how to make the deal work, especially if the initial debt coverage doesn’t seem to fit.
3. Leveraging Connections
The speaker is a member of the National Association of Government Guaranteed Lenders (NAGGL) and regularly meets with bankers to stay updated on lending appetites and SBA guidelines. This network allows the broker to find the best possible terms and conditions for your loan, even when your initial bank might not be willing to meet your needs.
The Benefits of Working with a Preferred Lender
One of the major advantages of working with a broker is access to Preferred Lenders (PLP). These lenders have the authority to underwrite SBA loans in-house, meaning they don’t have to send your loan application to the SBA for final approval. This can significantly speed up the process. Additionally, some of these lenders are balance sheet lenders, meaning they don't sell off the guaranteed portion of the loan, which can result in better pricing for you.
Creative Deal Structuring
In addition to faster approvals, brokers can also help with creative deal structuring. For instance, they might combine different SBA programs, such as a 7A loan for the business portion and a 504 loan for real estate. This flexibility can be particularly useful if you're involved in more complex transactions, like partial buyouts or franchise startups.
A Resource for Real Estate Investors
If you're a real estate investor, you might be wondering how this applies to you. The speaker also offers a free strategy call for real estate investors to help them develop a financial plan, whether you’re managing a portfolio of 30 properties or just starting with your first one. This consultation can provide clarity and direction, ensuring that you’re making the best possible financial decisions for your investment goals.
Final Thoughts
In conclusion, the key to speeding up your SBA loan approval process lies in working with a knowledgeable and connected broker. By leveraging their expertise and connections, you can avoid the common pitfalls of the SBA loan process and secure the funding you need more quickly and efficiently.
If you’re in the process of acquiring a business, starting a franchise, or need financing for any other business venture, consider booking a call with an SBA expert. The right guidance can make all the difference in getting your loan approved and closing your deal successfully.
For more tips and expert advice on financing, subscribe to channels that offer valuable insights, like the one featured in the video, where they discuss everything related to financing in the world of business and real estate.