Stop Throwing Darts at SBA Lenders
Stop Throwing Darts at SBA Lenders
Small business owners seeking SBA loans often resort to ineffective strategies akin to throwing darts blindfolded, hoping to hit the target. The two most common approaches involve starting with their current bank (“because the bank knows me”) or relying on a “Top National SBA Lender” list found online (“because the bank knows SBA”). While these seem like logical starting points, the reality is that neither strategy consistently delivers the best match or the most efficient lending process.
The Flaws in Current Strategies
Relying on your current bank might feel convenient because of an existing relationship. However, it’s rare for a local bank to have the specialized SBA lending expertise or the proven track record necessary for every unique business scenario. Banks are not one-size-fits-all, and the “familiarity factor” can mislead business owners into assuming their current lender is the best match for their needs. While your bank might know you, it may not know enough about your specific industry or the intricacies of SBA lending that align with your goals.
Similarly, referencing a generic “Top 100 SBA Lender” list is problematic. These rankings often measure total SBA loans processed rather than compatibility with individual businesses. A lender ranked highly nationally might be entirely unsuitable for your industry, location, or loan size. Matching your business to a lender that actively supports companies like yours is far more productive than focusing on broad rankings with little relevance to your unique circumstances.
The Importance of Finding the Right Match
Small businesses need an SBA lender that specializes in their industry and understands the challenges they face. A national lender might excel in financing construction businesses but lack the expertise for retail or healthcare industries. Geographic focus also matters—lenders familiar with the local economic environment or regulatory landscape can better expedite the lending process and ensure success.
Loan size is another critical factor. Some lenders prefer working on larger deals, pushing smaller business loan applications to the bottom of their priorities. For small business owners, this can lead to delays, rejections, or less favorable loan terms that don’t align with business goals.
How Analytics Can Help You Find the Best Match
Advanced analytics and a data-driven approach are the keys to navigating the complexities of SBA lending. Businesses should not be confined to a limited pool of lenders based on outdated lists or personal relationships. Instead, leveraging data to assess lenders’ expertise in particular industries, success rates in comparable loan applications, and familiarity with local markets ensures a better match.
The goal is not to find just any SBA lender but the right SBA lender for your business. For example, lenders with a focus on working with restaurants may not be suitable for all IT consulting firms. By evaluating lenders against your specific loan needs, your business can maximize its chances of approval while minimizing inefficiencies in the application process.
A Better Path Forward
Small business owners can no longer afford to rely on guesswork when choosing an SBA lender. With the right tools, guidance, and strategic insights, you can identify the lender that aligns with your business's goals and needs. Throwing darts at random lenders is an outdated approach, fraught with risks and unnecessary obstacles. Instead, take control of the process by seeking expertise, leveraging data, and prioritizing compatibility with your industry, location, and loan requirements. Doing so will save time, effort, and significantly improve your chances of securing the funding your business deserves.