Shopping SBA lenders

March 25, 2026

by a searcher from University of Louisville in St. Louis, MO, USA

What is the standard process for selecting a SBA lender to use for a potential deal. Is it okay to keep several SBA lenders on the hook or is it best practice to have narrowed it down to one before going under LOI. Is it okay to progress to the point that I have multiple term sheets with the specific business I am pursuing? I don't want to burn any bridges with lenders but also don't want to get tied down to the wrong lender.

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Reply by a professional
from University of Michigan in Detroit, MI, USA

Hi ^redacted‌, there are two approaches. (1) Identify between 2-3 possible lenders and reach out to discuss your deal. There is no requirement that you only work with one, at least initially. Different lenders will have a different credit box and working style. Get to know them. Who do you think will be the best partner? At some point, you'll sign a commitment letter with a lender. And then you are just working with one. You've made your choice. (2) Work with a loan broker. Loan brokers have relationships with several lenders. They can give you a wider picture of the debt market. And the good brokers will also be a trusted advisor. They'll help you structure your deal and get you through the loan process. A good starting point there is to reach out to ^redacted‌, who's a member of this community. I hope that helps. And if you need assistance with the legal side of buying a business, reach out redacted It'd be great to hear more about your plans.

Reply by a lender
from University of California, Los Angeles in Tampa, FL, USA

Hey Jonathan, looks like we're both Louisville grads - go Cards! When you are pre-LOI (or frankly even after you go under LOI), it's completely normal to have conversations with multiple lenders. And it's also completely appropriate to consider term sheets from multiple lenders. That's what loan brokers / debt advisors help with (like we do at SMB Loan Support). Where you should draw the line is going past the term sheet stage with more than one lender. If I can ever be helpful on any pre-LOI analysis, feel free to reach out. redacted

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