Engaging multiple SBA lenders

February 16, 2023

by a searcher in Dallas, TX, USA

Is it best practice to engage multiple SBA lenders for a deal or just stick to one? What should I think about if I am engaging with multiple? Thanks for your input.

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Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

I always tell people the SBA loan policy is like the wing span of a###-###-#### it is huge. However, lenders like to fly Cessna planes, meaning their internal policies are much more restrictive then what the SBA will ultimately allow. SBA lenders are often restricted internally with what markets, what industries, what ratios, and other requirements they use in determining who they do business with you. Your goal is always to find the lender that can best handle your specific deal. With that in mind when you first go to market with your deal you want to get feedback from multiple lenders. This will ensure that you get the best pricing and can find the lender most capable of doing your deal.

However, you do need to be cautious. Any lender that gets you a term sheet immediately has probably not had time to fully bet the deal internally with credit. So you want to be sure the deal has been fully vetted. When it comes time to move forward with an SBA lender, most require a deposit. Not all lenders will refund the deposit if you do not end up going forward with them, and even those that do you will probably lose a part of your deposit for any expenses they incurred in initial underwriting. So it can get quite expensive to move through the approval process with multiple lenders. So you really need to trust that the lender you are moving forward with is the right one for your acquisition and that they have full vetted the deal and you can trust they can get it done.

If you need any help looking for options, please let us know. I can be reached her or at redacted We have over 60 partners on the SBA side we work with to be sure we can cover all markets, industries, and structures. And we have trusted lenders we know we can get our deals closed with.

Reply by a lender
from California State University, Sacramento in Seattle, WA, USA

I like when my potential borrower speaks to several lenders. It’s about getting the fit right. And that right fit can vary from opportunity to opportunity. If it were me, I’d develop direct relationships with several lenders at the start of your search. We can be helpful to you along the way. When you have the specific deal in front of you, then you can talk fit on that one with your potential lenders. I’m ok having competition. And I’m happy helping you decide who’s the best for this one. It’s not always me nor should it always be. I do believe you working directly with lenders yourself puts more control in your own hands and you viscerally understand how decisions are being made with lenders and why. It helps you become a better searcher when doing the work yourself. Then you can choose best fit. And that may vary deal to deal. All the lenders on this platform are great. If you find yourself gravitating toward a deal that maybe harder to finance but you’re strong with your point of view and your diligence skills, then loan brokers on this platform can be very helpful.

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