No SBA Loan: Why Not?

I have run into many borrowers who have been told not to pursue an SBA guaranteed loan. Most of the complaints have to do with the due diligence process and the time it takes to acquire an SBA guaranteed loan. Over the years banks have become better at working with the SBA program and have been able to create a much more seamless approval process with these loan types.

I think the SBA does have a couple forms in addition to what normally is gathered for a conventional loan. These forms take about 5 minutes to fill out. Most lenders use forms that are compatible with SBA and conventional channels so that there is no problem in either funding scenario.There is an additional approval that must be granted by the SBA to move forward with the loan. This can take a maximum of 2 weeks to obtain. Other than the additional 5 minutes of paper work, and an additional approval, the process in obtaining a business loan with or without the SBA is the same.

The advantages to pursuing an SBA loan are often the terms and rates associated for higher risk loans. Sometimes a traditional bank source is not an option without the SBA guarantee on the loan request. If your request is eligible for an SBA guaranteed loan I would highly recommend it.

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