7 Keys to Being a Successful Referral Source for SBA 7(a) Loans

Referring small business owners to lenders for SBA 7(a) loans can be a great way to help your clients access the financing they need to acquire or expand their business. Referral partners play an essential role in connecting creditworthy borrowers with lenders offering SBA-guaranteed loans. Here are some tips (from an SBA lender) for being an effective referral source:

1) Learn the SBA 7(a) program - Familiarize yourself with SBA 7(a) loan features, eligibility requirements, and the application process. Our team hosts webinars and has created a free guide to help you learn about the program. You don't need to be an expert (that’s my job), but at least you must be familiar with the program's parameters.

2) Build relationships with lenders - Develop contacts with lenders who offer SBA 7(a) loans. Not all lenders are created equal. I recommend working with a preferred lender, also known as a PLP lender, and be sure you understand their lending criteria. Remember that SBA’s requirement is the minimum requirement; every lender will have different criteria for the same program.

3) Qualify prospects - Before referring clients, vet them to ensure they meet SBA 7(a) eligibility standards and have a viable business. Pre-screen for creditworthiness.

4) Prepare documentation - Help clients compile the financial statements, tax returns, LOIs, and other documents lenders will require. Typically, I recommend a quick one-pager deal summary so the lender can quickly digest the opportunity before diving in further. Complete paperwork is key for a quick pre-approval.

5) Make a warm hand-off - When introducing a client to a lender, provide a complete picture (both good and bad) of their business and financing needs. Communication is key at all stages of the loan process. Please don't hesitate to follow up with your lender to ensure the process progresses.

6) Learn from experience - Keep notes on the loan process for each referral and build on what you learn. Seek feedback from lenders on past referrals, and give feedback to the lender if there was something confusing or painful within their processes.

7) Close the loop - Check in with both the lender and your client during and after the application process. A good lender should provide updates throughout, but it doesn't hurt to check-in.

By becoming a trusted referral partner for SBA 7(a) loans, you can provide real value to small business clients while building beneficial relationships with lenders. I'd like you to focus on understanding client needs, choosing the right lenders, and communicating effectively.