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December 15, 2020

SBA Loan Reviews: What to Look For

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FF

Fora Financial

Staff

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So, how do you know which SBA lender to apply to as a small business owner? Your best bet is to read SBA loan reviews prior to submitting a loan application. This will make comparing SBA lenders easy and give you a good idea of the pros and cons of each option. Here’s a closer look at what you should consider when you check out SBA lender reviews prior to applying.

4 Factors to Look for in SBA Loan Reviews:

1. Customer Service

When you search for lenders who offer SBA loans, customer service must be top of mind. Chances are you’ll have questions about the process and will want them answered in a prompt manner. While you’re comparing SBA lenders, pay close attention to positive and negative remarks about customer service. If you find that many borrowers are complaining that they can’t get a hold of a lender or it takes days or weeks to get their questions answered, continue your search. On the contrary, if it’s clear that a lender makes customer service a priority and is easily accessible via phone, email, and online chat, their loan program is certainly worth considering. Good customer service can simplify the process of applying and getting an SBA loan approval. It’s particularly vital if this is your first experience with SBA loans and/or small business financing in general.

2. Lender History

Just because a lender was approved by the SBA to distribute its loans doesn’t mean it’s experienced in doing so. As you browse SBA loan reviews, you’ll notice that some lenders have provided more loans than others. Many of them reveal how many loans they’ve helped facilitate on their websites. If you come across a few lenders you like and all other factors seem to be the same, opt for the one that has the longest history with SBA loans. It’s highly likely that they offer a more efficient process and have more knowledge about the SBA. In addition, they may be more knowledgeable about the various loans the SBA offers, such as the SBA 7(a) loans and 504 loan program. SBA-Loan-Reviews-In-Text-Image

3. Requirements

SBA loans are far more difficult to get approved for than other small business loans. Therefore, it’s your responsibility to check out the requirements each lender outlines on their website. If you’re unsure of whether or not you meet all prerequisites or something is unclear, don't hesitate to call and gain clarity. Generally, to qualify for an SBA loan, you'll also need to prove that you haven't been able to procure traditional financing options. Keep in mind that no matter which lender you choose, there are certain documents you’ll need to provide. These include the following:
  • A detailed business plan that outlines your company's long-term goals and how you plan to utilize an SBA loan.
  • Your personal credit report and business credit report. If you have bad credit, this could affect your ability to qualify for a loan.
  • Recent income tax returns and financial statements to give the lender an idea of how your business's overall financial health is at this time.
In addition, you may need to show legal paperwork such as business licenses and registrations, articles of incorporation, franchise agreements, and commercial leases. Although most of the requirements listed above are universal when applying for an SBA loan, individual lenders still might have their own prerequisites. If you want to learn how an SBA lender compares to others, look for reviews that mention their requirements.

4. Repayment Terms

Before you sign on the dotted line and take out an SBA loan from any lender, it’s essential to familiarize yourself with repayment terms. For instance, you'll need to know how long it'll take you to fully pay back the loan amount that you’re interested in. Fortunately, most SBA lenders offer long repayment terms to give your business some time to repay the money you borrow. Once you understand repayment terms, get to know repayment options. Most lenders will allow you to repay your loan online. Others may be more old fashioned and promote in-person or phone repayments.

Where to Search for SBA Loan Reviews

There are numerous websites that you can turn to read SBA loan reviews from fellow business owners. Here are some examples of sites that will make comparing SBA lenders convenient.
  • Better Business Bureau (BBB): The BBB has been around since 1912 and serves as a non-profit with a focus on bringing trust to the marketplace. It uses an A+ to F rating system to rate each business on its site.
  • TrustPilot: Founded in Denmark in 2007, TrustPilot is a customer review website that hosts reviews of businesses across the globe. Almost 1 million new reviews are posted on the site each month.
Before you visit these review sites, you may want to go to Lender Match, a free online tool created by the SBA. After you describe what you’re looking for, you’ll get emails from lenders who are interested in working with you. There’s no obligation to move forward with any lender so you can do your research before you commit.

Meet Your Business Goals with an SBA Loan

An SBA loan can give you the funding you need to meet (or even exceed) your business goals, regardless of what they may be. With an SBA loan, you may enjoy access to additional capital, reasonable terms and conditions, and consistent cash flow. In addition, by repaying your loan fully and on-time, you may even earn good credit. Since there are many differences between lenders who offer SBA loans, it’s important to do your research and check out SBA lender reviews. By doing so, you can make an informed decision for your unique situation.