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The Top SBA Lenders of 2018
Looking for the perfect SBA lending institution to fund your next business move? Increase your odds by going with one of the top lenders of 2018. Here, we compare six of the top SBA 7(a) lenders in different geographic areas in the U.S. to help you determine which SBA lending institution is right fo
When you’re searching for the very best SBA loan for your needs, a little research can save you a lot of time and money in the long run. There are more than 3,000 banks and credit unions nationwide who offer SBA loans, so finding the best financial institution can take a little legwork on your part.
Here, we'll compare the highest recommended SBA Lenders for your small business in 2018. Remember to find a lender that makes loans in your geographic area, in your industry, and in the dollar amount you need.
Top SBA Lender #1: SmartBiz
First up is SmartBiz. If your business is older than twenty-four months, and it meets profit and credit eligibility, you can obtain funding in minutes. SmartBiz offers up to $350,000 in capital. This loan can be used for debt refinancing, marketing, equipment purchases, or inventory or employee expansion.
SmartBiz offers up to $5 million for commercial real estate loans used to purchase a new business property or refinance the business property you already own. SmartBiz is highly rated by small business owners for the convenience of being an online financial intuition, and its fast application process.
Top SBA Lender #2: Wells Fargo
Wells Fargo also receives high ratings because they give out more SBA loans, to more satisfied customers, and lend out more money than any other lender in the country. Wells Fargo is consistently rated # 1 in the SBA’s quarterly ranking of top SBA lenders, often getting customers funded in as little as 30 to 60 days.
Wells Fargo is very experienced in dealing with small business needs. It offers loans from $10,000 to $5 million, with most of their SBA loans going to startup businesses or business acquisitions. Wells Fargo is available in all 50 states, and has loaned more than double the amount of money than any other lender –- making them a clear front-runner in SBA lending.
Per the SBA’s list of active lenders, Wells Fargo reigns supreme. In 2016, Wells Fargo approved 1,554 SBA loans for a total of $458,930,900 in 7(a) SBA loans. They've certainly earned the top spot on the list of the best banks for small business loans.
Top SBA Lender #3: Chase Bank
Chase Bank is another top SBA lending institution. Chase offered 735 different SBA loans in 2016, lending a total of $149,339,900 to small business owners like you. Like Wells Fargo, Chase Bank is a well-known name with a high-level of involvement with new and startup business loans.
In addition, Chase Bank doesn't require 2 years of business history to consider you for an SBA loan, as most lenders will. Chase works to approve your loan regardless of how long your business has been operating. The process can be quick, too: if you have a minimum 680 credit score, financing your loan will take only 45 to 90 days through Chase.
Top SBA Lender #4: Live Oak Banking Company
Live Oak Banking Company should also be on your list of SBA lending institutions to check out. Live Oak is a nationwide institution that lent a whopping $362,614,300 in 2016 via 281 loans from the SBA, and the average funding time is around 45 days.
Live Oak offers SBA loans of up to $5 million, and the funds are typically used to fund major expansions to operations or acquire other companies. You must be an established business with strong financials to qualify for a loan; you must prove your business has a strong cash flow, no bankruptcy history, or tax lien issues.
Note that Live Oak only services businesses in specific industries. This is good if you are in an industry that can’t be financed by another lender. However, if your niche business is outside of the following services, then Live Oak is not an option for you. Here are the industries that Live Oak supports:
Accounting and tax firms
Agriculture
Educational services
Family entertainment centers
Funeral homes
Government contracting
Healthcare and dental
Hotels
Insurance
Investment advisory
Pharmacy
Renewable energy
Self-storage
Senior care
Veterinary
Wine/craft beverage
What are the best SBA lenders for small businesses in 2018?
The best SBA lenders for small businesses in 2018 are Wells Fargo and Chase Bank. Wells Fargo is consistently rated #1 in the SBA’s quarterly ranking of top SBA lenders, often getting customers funded in as little as 30 to 60 days. Wells Fargo offers loans from $10,000 to $5 million, with most of their SBA loans going to startup businesses or business acquisitions. In 2016, Wells Fargo approved 1,554 SBA loans for a total of $458,930,900 in 7(a) SBA loans.
Chase Bank is another top SBA lending institution. Chase offered 735 different SBA loans in 2016, lending a total of $149,339,900 to small business owners. Chase Bank doesn't require 2 years of business history to consider you for an SBA loan, as most lenders will. The process can be quick, too: if you have a minimum 680 credit score, financing your loan will take only 45 to 90 days through Chase.
What are the advantages of using an SBA loan for small businesses?
The Small Business Administration (SBA) offers a variety of loan products that can be beneficial to small businesses. These loans typically range from $500 to $5.5 million and can be used for most business purposes, including operating capital and long-term fixed assets. Additionally, the SBA guarantees the loan, which makes banks more willing to offer these loan products to high-risk borrowers. This can be especially beneficial for small businesses that may not qualify for more traditional business loans.
The SBA also offers a few easy to remember requirements for businesses seeking SBA financing. These include being a for-profit company, being located in and conducting business in the United States, having owner-invested equity, and not receiving funding from any other financial lender. Business size, ability to repay, and the purpose of the business are also taken into consideration.
What are the requirements for obtaining an SBA loan?
The requirements for obtaining an SBA loan vary slightly between lenders, but in general, you must meet the following criteria:
- A good credit score - preferably above 680.
- A history free from recent bankruptcies, foreclosures, or tax liens.
- Having been in business for at least two years.
- The ability to provide collateral for loan requests over $25,000.
- The ability to make a down payment of 10% if your intended use of funds is to purchase a business, commercial real estate, or business-related equipment.
- Sufficient cash flow to meet your debt obligations.
- Sufficient working capital (once you subtract liabilities from assets).
- “Good character” according to the SBA (partially decided based on your track record of managing your resources and day-to-day business affairs).
In addition to the qualifications above, a business must also meet the general eligibility requirements for SBA loans, such as being in an approved industry (i.e. no gambling, lending, real estate investment, or speculation-based businesses allowed) and being a for-profit company based in the U.S.
For existing businesses over 2 years old, you must also have:
- Business must have positive cash flow
- Decent credit score (minimum of 575 for many lenders, though a score of 620-640 is preferred)
- At least two years of experience in the industry
- Sufficient collateral, or a co-signer with collateral and good credit
For start-ups, you must also have:
- Owners must have at have put at least 25% of their own funds in the business
- Good/decent credit
- At least two years of industry experience
- Sufficient collateral, or a co-signer with collateral and good credit and the ability to potentially repay the loan
- Strong business plan, including financial projections and market analysis
What are the different types of SBA loans available?
The Small Business Administration (SBA) guarantees many different types of loans to meet the unique needs of most small business owners. The most widely used loan is the SBA 7(a) loan, but there are other options available. The other types of SBA loans include:
What are the benefits of using an SBA loan for commercial real estate?
The SBA 7(a) loan is a versatile loan that can be used for nearly any legitimate business purpose, including the purchase of owner-occupied commercial real estate. It typically requires 10% down and carries terms of up to 25 years. Additionally, SBA loans are typically provided at variable interest rates for terms of up to 25 years, or shorter if real estate is not involved. Rates are tied to the WSJ Prime Rate, and the higher the loan amount, the lower the spread, typically.
By working with an SBA Preferred Lender, like ReadyCap Lending, the business owner can quickly close a deal and get the keys to the building they need.
Top SBA Lender #5: Huntington National Bank
Huntington National Bank has ruled in the top 10 SBA lenders for 8 years in a row now. In fact, for 2016 they ranked #3 for the best banks for SBA loans. During 2016, Huntington National Bank lent 837 SBA loans for a total of $163,840,500 to small businesses like yours. They also offer flexible payment options on loans ranging from $5,000 to $5,000,000.
The down side: Huntington National Bank only operates in eight states (Illinois, Indiana, Kentucky, Ohio, Michigan, West Virginia, Western Pennsylvania, and Wisconsin). Huntington National Bank also focuses on smaller SBA loan applications with an average SBA loan size of $185,237. There are over 1,300 Huntington National Bank locations, however both Wells Fargo and Chase Bank have well over 5,000 locations nationwide, so take your location into consideration when looking at Huntington National Bank.
Top SBA Lender #6: Celtic Bank Corporation
If you’re looking for a smaller but still national lender, check out Celtic Bank Corporation. In 2016, Celtic Bank approved 360 SBA loans for a total of $139,972,100. Celtic Bank can help you take advantage of their loan opportunities to grow and expand your small business via working capital, refinancing, business acquisition, real estate purchase or construction, or purchase of equipment or inventory.
Celtic Bank offers loan amounts from $350,000 to $5 million, and can underwrite and approve loan requests in-house, which will get you the capital you need quickly.
There are excellent nationwide and local lenders to examine when researching which SBA loan is best for you. Take your time and do your legwork to obtain the funding that is best for you and your business — and of course, reach out to us at SBA7a.loans with any questions you have. We're happy to help!
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