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HomeB2BHow to choose the right SBA lender for your business

How to choose the right SBA lender for your business

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Your business is your baby. You’ve stayed up late into the night with it, gotten up early for it, and skipped many meals to make sure that it was fed. So, when it comes to taking care of it, you will settle for nothing but the best. However, sometimes you just don’t have the financial resources to take total care of your business.

Sometimes, you need help from a third party to give it all the opportunities it needs to grow up big and strong, taking advantage of every opportunity the world offers it. When that is the case, you need a loan. Thankfully, the US government has created the Small Business Administration, or SBA, to help people just like you.

There are a number of different businesses that partner with the SBA to offer loans. After all, the SBA is just guaranteeing the loans, promising to pay the lender back if you default. So, you need to evaluate all your options and see which lender is your best bet. Here are a few questions we suggest asking to make sure that you are finding the right people to help fund your baby.

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Do they offer the specific SBA loan you need?

You cannot just go to a bank and ask for an SBA loan. This is because the SBA offers a number of different loans. In addition to the well-known SBA Express loans, the SBA also offers 504 loans for businesses recovering from disasters, the standard 7(a) loan, and many other options. Each of these is a custom tailored financial product designed for different businesses in different circumstances.

The bank will be happy to provide whatever information you need about these loans, but it is a good idea to check them out online before going in, that way you know what you’re talking about and won’t get taken advantage of by any salesmen. Even beyond any bad intentions, no one knows the situation of your business quite like you, so you should take the initiative to learn about all your options.

Past successes

Chances are, this financial institution has been giving out loans for a while now, so there should be plenty of businesses to speak to about their customer service and the kinds of support they offer. Moreover, they should be able to speak about how they have helped other businesses achieve success.

Even if the information is privileged and they can’t discuss specifics, asking the bank’s representatives how the support they offer in addition to the loan has helped specific businesses can give you some things to compare. What did the different representatives highlight? That tells you what they think their strengths are. What did they downplay? That tells you where they think they are weak.

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Do they specialize?

Specialization is the key to the economy. America would not be the wealthy first world country it is today if everyone had stayed as generalists, growing their own food and creating whatever they need for their own consumption. In many ways, the lending industry is the same. While banks will likely offer lots of different products, some banks – especially smaller ones – often have an idea of a target demographic. Some focus on lending to small businesses, others to individuals, still others to government agencies.

Looking for a bank that focuses on SBA loans is a great way to make sure that you will be a priority when you get your loan. If SBA loans – and small business loans in general – are a miniscule part of the organization’s portfolio chances are you will struggle to find adequate help when you run into problems. It is also less likely that there will be tools specifically designed for your situation.

The good news is that with any publicly held bank this information is accessible. But rather than digging through financial statements of every bank in the country, simply searching for the best SBA lenders online should be sufficient. A number of different websites will be happy to provide lists with supporting information for their rankings.

Regardless of the lender you ultimately decide to go with, you need to remember that a loan is a tool for your business. It should not be a source of hassle and stress for you. The monthly payments should simply be one more expense that seamlessly integrates into your cashflows – which ought to be even higher after all the improvements you were able to make after taking the loan – and not something that causes you to stress every month.

No one knows your business quite like you, and no one cares about your business nearly as much as you, so take lots of time to research all your options and find the perfect fit for your SBA loan!

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