Where to find SBA lenders, loan information
The good news is that the SBA loan program is easier to navigate than lingering tales of paperwork snafus and other delays suggest. Not so good is the fact that finding lenders who participate in the SBA program can be something of a challenge.
Overall, says Javier Placencia, the SBA loan program “is a good thing. You can use the money for growth capital, expansion, refinancing, to purchase real estate and equipment” and a fairly impressive list of other business needs.
Based in Crystal Lake, Placencia is vice president and Midwest SBA business development officer for Northeast Bank. Northeast is headquartered in Lewiston, Maine, with its SBA headquarters in Boston. Placencia is one of seven strategically located regional loan officers who allow Northeast to provide a hands-on touch. Similar national lending programs are relatively common in the SBA sector.
Three additional things you should know:
• Although more cluttered than it once was, www.sba.gov is a good place to find basic knowledge about Small Business Administration loan programs. www.sba.gov/il will generate localized information.
• The SBA doesn't lend money. Instead, the agency provides varying guarantees to more traditional lenders, giving banks and other sources more comfort in making loans to small businesses.
• Owner equity is part of the deal.
Finding lenders who participate can be a bit of a chore.
“Every bank is eligible” to participate in SBA lending programs, but not all do, Placencia says, adding that you'll likely want a bank with SBA experience. “Look for SBA preferred lenders,” he says. “They have a very streamlined operation, and the bank will do its own underwriting.”
Placencia's first suggestion is to call your own bank and ask if it makes SBA loans. If it does, make an appointment. If it doesn't, call other banks you know.
“Go to the lender rankings on the SBA website,” Placencia advises. If you're willing to register, the SBA's LINC connection will send your data to lenders the system determines can meet your financing needs. Then it's up to the lenders to get in touch with you.
SCORE also is a good information resource, Placencia says.
“Kick the tires,” Placencia says. “You want to know whether the bank can grow with you. Do the bankers know your industry? Do they understand what you're trying to do?”
The most recent local list of SBA lenders I found listed Village Bank & Trust, Arlington Heights; Wells Fargo; Chase; First Mid-Illinois Bank & Trust, Mattoon; and BMO Harris as the top banks by loan amounts for the SBA 7a loan program.
Intended to help borrowers “starting, acquiring and expanding” a small business, the 7a is the broadest and, therefore, most popular SBA loan. Also popular, the 504 loan program centers on long-term, fixed-rate loans to finance real estate — in case you want to buy a larger building, for example — and capital equipment.
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