Faster Government-Guaranteed Loans for Small Businesses

By Bruce Hurta

For small businesses that are in the market for an SBA 7(a) government-guaranteed loan, processing the loan request and funding the loan proceeds has become a much quicker process.  The U.S. Small Business Administration (SBA) continues to focus on ways for participating lenders to deliver small business loans with more ease, efficiency, and speed.  In fact, the SBA loan underwriting process has evolved to its present state whereby it is more efficient than many banks’ conventional small business loan underwriting processes.  By uniformly evaluating loan requests through the use of SBA forms and procedures, participating SBA lenders, such as banks and credit unions, are able to quickly and efficiently serve their small business loan requests on a consistent basis for each lender.  Indeed, the federal government fiscal year that ended September 30, 2014 promises to be another vibrant year for SBA loan production throughout the United States.

Of great importance, for the efficiency of this program, is the PLP (Preferred Lender Program) for SBA 7(a) lenders.  With a minimum amount of time, satisfactory experience, and demonstrated proficiency with the SBA government-guaranteed loan program, an SBA lender may now earn the PLP designation so that they are given the authority by the U.S. Small Business Administration to approve SBA 7(a) loans on behalf of the SBA.  This program has created a group of highly experienced and proficient SBA lenders who no longer must wait for a second set of SBA processing and approval before funding the loan.  As long as the lender remains in good standing with the SBA and its PLP requirements, they can continue to process, close, and fund SBA loans using only their own authority.  One can draw the conclusion that working with a PLP lender assures the borrower maximum expertise in working with the SBA loan program and the quickest processing time available.

Why is the SBA PLP program important to small business owners?

Probably the most important reason is that small businesses are finding fewer and fewer community banks who specialize in small business lending.  As the banks are bought and consolidated into larger organizations, the business lending platform evolves into serving middle market and public companies.  The SBA government-guaranteed loan program has become the new loan of choice for many small business owners who could not find their usual community bank accommodation.  Additionally, SBA loans have lower down payments, longer repayment terms, and easier qualifying criteria than conventional bank loans. The partial government guaranty on the loan allows the lender to accommodate more risk in their small business credit decisions.

In Houston, the SBA District Office accommodates 32 counties in and around Houston.  The Houston office, like every other District SBA Office, maintains a list of SBA Preferred Lenders in that district along with the number and dollar volume of loans they have funded.  This list is a good resource for small businesses trying to identify the most active and qualified SBA lenders in their area.

SBA loans can be used for any legitimate business expenditure including but not limited to: 

·        small business real estate purchases

·        small business real estate new construction

·        consolidating existing business debts

·        business expansion, new equipment, or furnishings

·        business acquisitions

·        partner buyouts

·        working capital 

SBA 7(a) government-guaranteed loans are available up to $5 million per borrower.

You can learn more about SBA lending and small business finance on Bruce’s blog at brucehurta.wordpress.com.  For more information about SBA real estate loans for small businesses, contact Bruce Hurta, Business Lending Manager at Members Choice Credit Union at 281-384-2595 or by email at bhurta@mccu.com.