How to Pick an SBA Lender

Your odds of getting a loan improve, says Ami Kassar, if you choose the right bank.

Good Morning!

Here are today’s highlights:    

• Mark Zandi doesn’t see how the economy could be performing much better—but smaller businesses are still feeling the effects of inflation, labor shortages, and supply-chain issues.

• Companies are already preparing to raise prices if Donald Trump wins the election.

• And Trump advisors are planning to restrict legal immigration, too.

FINANCE

Ami Kassar offers advice on picking the right SBA lender: “In fiscal year 2024, which ended on September 30, we funded 92 SBA 7(a) deals with 19 different lenders. So, how do we pick the lenders? To understand this, it’s important to understand how the overall SBA market works. In fiscal 2024, 1,473 different lenders made SBA 7(a) loans, but the top 100 made 74.3 percent of all the loans by volume. So, if you were picking a lender to help you access a program with all kinds of rules and regulations, would you rather work with a lender with relevant expertise or one still figuring things out? I assume you would answer the same way you would if you were picking a surgeon.”

• “Looking at this year’s top 100 lists, you will see 15 brand-new lenders. This happens because lenders’ credit appetites tend to change over time, especially in a market like the one we’re in now. We always look for lenders who are growing and try to avoid lenders who are curtailing their lending.”

• “The smallest average deal of a lender on the top 100 list is $113,257, and the largest is $2.6 million. Most of the lenders on the smaller end focus on small SBA Express loans; those on the larger end generally specialize in real estate transactions. You want to make sure your loan is at a shop that matches your needs.”

• “Two of the top 100 lenders only lend in two states, while five lenders lend in all 51 states. The median number of states they lend in is 19. While at MultiFunding, it’s faster and more efficient for us to work with national lenders, sometimes there are specific reasons to pick a local or regional player.” READ MORE