Give Us a Call 24/7 to Speak to a Loan Specialist: (866) 526-0238
Give Us a Call 24/7 to Speak to a Loan Specialist: (866) 526-0238

SBA Loan Brokering and Advising: SBA Loan Consultants

Small Business Administration Loan Brokering

American small businesses are an essential part of the United States economy, being that nearly two out of every three new jobs are created by small companies. The U.S. currently has over 28 million small businesses operating for-profit and employ around half of the total U.S. workforce. To keep American small enterprises growing, these small companies need access to affordable capital. Oftentimes, these small businesses find themselves shut-out from traditional bank financing because they don’t meet their banks credit and capital requirements, the business firm hasn’t been in operation long enough to make the bank feel comfortable providing a loan, or because the small business doesn’t have sufficient cash-flow to service the loan. In fact, a 2013 study by the New York Federal Reserve of small business owners found that access to capital was the top concern of small business owners. Access to sufficient capital has been so difficult to secure that only 55% of profitable small businesses that apply for a loan actually receive funding.

To help small businesses gain access to affordable capital the United States Small Business Administration provides loan guarantee programs to banks, community and commercial lenders to help increase the approval of bank-rate financing to small companies. But not all SBA lenders are the same. Some focus only on specific programs like the SBA 7(a) program and SBA 504 program, while others only focus on the SBA Express loan program and SBA Microloan program. On top of that, some lenders have regional and industry restrictions, or have a preference in mostly funding real estate, equipment, working capital, acquisitions, partner buyouts, etc.. Even more, SBA loans require more paperwork and documentation than other types of business loans because the SBA wants to guarantee that small businesses meet their standards to qualify for the program. Navigating the paperwork and documentation process can be tricky and time-consuming (especially for small business owners that spend enormous amounts of time running their operations).

What is a SBA Loan?

SBA loans are a type of financing provided by large banks, small banks, community and and other commercial lenders that are partially/mostly guaranteed by the U.S. Small Business Administration (SBA). The SBA doesn’t actually loan money to small businesses, but instead encourage SBA lenders to loan money to companies by covering up to 90% of the lenders’ losses should the borrower default on the loan. By covering a large portion of the lenders’ losses, the SBA loan program helps encourages lenders to fund companies with affordable bank-rate financing because their risk is almost reduced or nearly non-existent.

What is an SBA Loan Broker?

SBA loan brokers and financing consultants will analyze the borrowers financial data, explain all the SBA loan programs and financing options available to the small firm, prepare an SBA loan package to submit to SBA lenders, and then find the right SBA lender to fund the small business. After finding the small business the right SBA lender to provide them financing, the SBA loan consultant will then work with the borrower to prepare all the documents and paperwork needed for full-underwriting by the lender. After that good SBA loan consulting experts will work with you from the beginning of the process until you are funded.

Why Use a SBA Loan Broker?

  • They are experts in navigating SBA loan programs
  • Good SBA loan consultants and brokers can analyze your financing needs and offer expert advice
  • Qualified SBA business loan brokers have relationships with lots of SBA lenders in all regions of the country
  • SBA loan experts can speed up the overall funding process by weeks.

Reasons You Should Not Use a SBA Loan Broker

If you feel comfortable navigating the SBA process on your own, then deciding not to use SBA loan consulting may make sense. Some SBA financing brokers will require an upfront packaging fee to prepare their SBA loan request. The problem is: you may be paying that fee without knowing if you are even SBA qualified, or without knowing if the SBA loan adviser has a sufficient network of lenders to properly-handle the situation. In fact, you have to keep in mind that small business lending is pretty much unregulated at the moment. And with the lack of regulation the number of poorly-informed (or ethically challenged) business loan brokers have increased. These brokers are usually more concerned with putting their own interests before those of their clients. What does that mean for the client: the broker steers the small business towards a high-rate and expensive merchant cash advance or other alternative loans rather than traditional financing. They are also much more lucrative for the broker (at the expense of the client). That is why making sure a SBA brokering expert has your best interest at heart is important. Talk to them about your situation, and see what they have to say. If they want to steer you toward high-rate financing from the beginning, run.

Conclusions

Protect yourself. Make sure the consultant is going to steer you toward SBA and/or traditional financing first. Make sure their network of lenders is substantial, and don’t look to alternative lending options until you’re exhausted all of your SBA and traditional financing options.

Who We Are

GUD Capital is a nationally recognized leader in the financing industry for providing the best business lending solutions available to small and mid-sized businesses. We leverage our network of 4,000 competing commercial lenders to provide your business the largest selection of commercial financing options.

Get Started

Recent Posts

Cannabis Business Loans: Dispensary Financing and Marijuana Industry Investment
July 26, 2017
Commercial Loan Broker: Types of Commercial Finance Brokers
July 19, 2017
Utah Business Loans: Financing For Utah Small Businesses
July 18, 2017
Georgia Business Loans: Financing For Peach State Small Businesses
July 17, 2017
Low Doc Business Loans: Financing with Low or No Documents:
July 12, 2017
Arizona Business Loans: Financing For Arizona Companies
July 11, 2017
Investment Real Estate Loans: Financing For Investment Properties
July 10, 2017
Commercial Balloon Refinancing: How to Refinance Commercial Balloon Mortgage
July 8, 2017
Office Building Loans: Commercial Financing and Mortgages For Office Buildings
July 3, 2017
Idaho Business Loans: Financing For Gem State Idaho Companies
June 30, 2017
MCA Split vs. MCA Lockbox: Comparing Different Merchant Cash Advance Funding Payments
June 28, 2017
Purchase of Future Receivables: Selling Future Bank and Merchant Receivables
June 26, 2017
101 Business Loan Tips: Advice For Small Businesses Seeking Loans
June 22, 2017
Types of Commercial Real Estate Loans & Mortgages
June 21, 2017
Merchant Cash Advance Without a Confession of Judgment: Cash Advances with No COJ
June 19, 2017
Two Merchant Cash Advances Stacked? Reasons Business Resort to Stacking Cash Advances
June 15, 2017
Alternatives to Merchant Cash Advances: Non-MCA Funding Options
June 13, 2017
Long-Term Working Capital: Loans & Financing For Long-Term Growth
June 12, 2017
Oregon Business Loans: Financing Options For Oregon Companies
June 10, 2017
How to Use Business Real Estate to Get Working Capital
June 9, 2017
Refinance a Commercial Mortgage: Commercial Real Estate Loan Refinancing
June 8, 2017
Colorado Business Loans: Lending For Colorado Small Businesses
June 7, 2017
Virginia Business Loans: Financing For Virginia Companies
June 4, 2017
Subprime Business Loans: Funding For Companies With Subprime Credit
June 1, 2017
Illinois Business Loans – Financing For Illinois Small Businesses
May 31, 2017