The Best SBA Lenders For Small Businesses (& How To Choose The Right Lender For Your Needs)
If you’ve been on the hunt for an affordable small business loan, Small Business Administration (SBA) loans are probably already on your radar. With high borrowing limits, long repayment terms, competitive interest rates, and less stringent requirements than traditional low-interest loans, it’s no wonder SBA loans are highly sought by small business owners.
One thing commonly misunderstood about SBA loans is who does the actual lending. The SBA does not provide loans. Instead, this government agency guarantees a significant percentage of each loan. In other words, the lender will be protected in the event of borrower default. This gives an incentive for banks, credit unions, nonprofits, and other lenders to provide affordable loans with favorable terms to small business owners who wouldn’t otherwise qualify for other low-cost financing options.
If you’ve decided that an SBA loan is what you need to take your business to the next level, that’s great! The next step is to determine which types of SBA loans best fit your needs. Once you have an idea of what type of SBA loan works best for your business, it’s time to find a lender. Of course, you can always start at your financial institution where you already hold accounts. But as with any other financial product, it’s a good idea to explore your options. And there’s no better place to start than with reputable lenders that have experience securing SBA loans for their customers.
In this post, we’re going to take a look at the top 10 SBA lenders based on data from the SBA itself. We’ll explore why each lender made it onto the list, what types of loan options are available, how to choose the right lender for your business, and even how to kick off the application process. Ready to get funded? Keep reading to learn more about the top SBA lenders for small businesses.
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Top 10 SBA Lenders (According To The SBA)
From local financial institutions to online options, the good news is that there are plenty of SBA lenders to choose from. The bad news? Narrowing down the choices to find the right lender for your business can be a challenge. Fortunately, we’re here to help you by pointing you in the direction of the top 10 SBA lenders.
How did these lenders make our list? They actually top another list — the SBA’s 100 Most Active SBA 7(a) Lenders. These lenders have distributed millions of dollars to qualifying small businesses, and yours could be next. Let’s take a closer look at each lender to help you make an informed borrowing decision.
1.) Live Oak Bank
Live Oak Bank was founded as a way to provide veterinary practices with financing outside of the “broken” traditional banking system. Over the years, this bank has expanded to service other industries, including but not limited to agriculture, insurance, and healthcare. What makes Live Oak Bank stand out is its teams of experts. Each team focuses on a specific industry to help small businesses receive loans and to also provide guidance through the duration of the loan. This approach works, as evidenced by the billions of dollars the company has loaned to small business owners.
Live Oak Bank’s most popular option for SBA funding is the 7(a) loan, which provides small business owners with up to $5 million with repayment terms up to 25 years. This lender offers funding options for acquiring a business, expansion, and refinancing. For businesses affected by COVID-19, Live Oak Bank will also participate in the Paycheck Protection Program (PPP) outlined in the CARES stimulus package.
As an SBA Preferred Lender, Live Oak Bank helps borrowers receive SBA-backed loans faster than other lenders. Although all SBA loans are competitively priced, Live Oak Bank keeps its interest rates and fees on the lower side to make this type of funding even more accessible and affordable.
To qualify, borrowers must have a minimum personal credit score of 680. They must also have been in business for at least three years. Businesses in all 50 states can apply through Live Oak Bank’s website. Potential borrowers can choose to work with an industry-specific team or a team that works with all industries. Check out our Live Oak Bank Review: Business & SBA Loans to learn more about this lender.
2.) Newtek Small Business Finance
Newtek Small Business Finance bills itself as “Your Business Solutions Company.” One of those solutions is providing funding for small businesses. This includes SBA loans, as Newtek is listed as one of the top SBA lenders.
Newtek doesn’t specify what SBA loans it specializes in. However, the company does state that borrowers can receive as much as $15 million to be used for a variety of business purposes. Repayment terms are as long as 25 years. Newtek also helps borrowers affected by the coronavirus with Economic Injury Disaster Loans.
All applicants must have an existing for-profit business with at least two years of tax returns. Additional requirements can be discussed with a financial specialist. Interested borrowers can get a prequalification by visiting Newtek’s website. For more information, you can also chat, email, call, or request a call back from the lender. To learn more about this lender, check out our Newtek Small Business Finance Review.
3.) Wells Fargo Bank
Wells Fargo Bank is one of the most well-known in the world. Founded in 1852, Wells Fargo has grown to serve over 70 million customers with its selection of personal, small business, and commercial financial products. Business owners that are looking for the best funding options can use the bank’s online services or visit one of over 8,000 branches.
For small businesses, Wells Fargo offers two SBA loan options: 7(a) loans and 504 loans. The 7(a) loan provides borrowers with up to $5 million. Repayment terms are up to 25 years for commercial real estate purchases or up to 10 years for other business purposes.
A 504 loan is best suited for construction, commercial real estate purchases, or equipment purchases. Wells Fargo will loan up to $6.5 million, while the borrower may also receive up to $5 million from a Certified Development Company (CDC). Repayment terms are up to 25 years for commercial real estate purchases or up to 10 years for machinery or equipment purchases.
Wells Fargo will also participate in the PPP to help businesses affected by COVID-19.
Like other SBA lenders, Wells Fargo has several requirements businesses must meet to qualify for funding. SBA loans are available to businesses with a tangible net worth below $15 million and an average net income of less than $5 million over the past two years. Additional requirements, including personal credit score and time in business, will be reviewed by an SBA specialist at the time of application.
Wells Fargo Bank offers an online application, or you can visit your local branch to find out more about its SBA loans and other small business funding options.
4.) Byline Bank
Byline Bank is a financial institution that serves the Chicago metro area and Milwaukee through its 52 branches. Although that may seem small when compared to some of the nation’s big-name lenders, Byline Bank is also one of the top 10 SBA lenders in the US.
Don’t worry — you don’t have to live in Chicago or Milwaukee to obtain an SBA loan through Byline Bank. This institution services small business loans nationwide and offers many options to meet your needs.
Byline Bank offers SBA 7(a) loans up to $5 million. Repayment terms are up to 25 years for commercial real estate and up to 15 years for other purposes. For commercial real estate or equipment purchases, businesses can apply for 504 loans with repayment terms of 10 to 25 years.
Businesses that want a more flexible option can receive a line of credit through the SBA CAPLines program. Lines of credit are available up to $5 million and are ideal for business expansion, purchasing inventory, covering payroll, or to fill in revenue gaps. Repayment terms are 12 months to 10 years.
Like other SBA-approved lenders, Byline Bank will participate in the PPP program to help businesses negatively affected by the COVID-19 pandemic.
Interested borrowers in the Chicago or Milwaukee areas can visit their local branch to kick off the application process. Borrowers located in other areas can submit an online information form and receive a call back from an SBA specialist to learn more about how to apply, requirements for obtaining an SBA loan, and what products will best fit their needs.
5.) The Huntington National Bank
The Huntington National Bank was founded in 1866, and since its inception, it has grown to have over 800 branches in seven states: Ohio, Illinois, Indiana, Kentucky, Michigan, Pennsylvania, and West Virginia. Huntington National Bank offers multiple financial products for consumers, small businesses, and commercial needs, including SBA loans.
There are three primary SBA loans available to Huntington National Bank customers. This lender provides 7(a) loans for almost any business purpose. For borrowers that like the flexibility of 7(a) loans but don’t want to wait months to receive their funds, Huntington Bank offers SBA Express loans, which has low-interest rates, high borrowing limits, and faster approval times. Huntington Bank also is a provider of 504 loans to use for business improvements and expansions. Huntington Bank will also provide relief to small businesses affected by the coronavirus.
Huntington National Bank can connect qualified borrowers with loans of $5,000 to $5 million. Rates, terms, and borrower requirements vary by product. You can visit your local branch to find out more about Huntington Bank’s SBA loans, or you can call or email an SBA specialist to learn how you can get started.
6.) Celtic Bank
Celtic Bank was founded in 2001, so it’s the new kid on the block when compared to the other lenders on this list. Don’t be fooled, though, as this bank has already become one of the top 10 SBA lenders in the country — a title it’s held since 2013. Celtic Bank is an SBA Preferred Lender and, therefore, processing times may be shorter than working with other lenders.
Through Celtic Bank, you can apply for an SBA 7(a) loan with limits up to $5 million and repayment terms of up to 25 years. For faster approvals, Celtic Bank offers the Celtic Advantage loan, an SBA-backed product that’s similar to the SBA 7(a) loan. The primary difference (other than approval times) is the maximum borrowing amount. With this loan, borrowers can only receive a maximum loan of $350,000. Repayment terms of up to 25 years are available.
Celtic Bank also provides funds through the 504 loan program. Qualified business owners may receive up to $10 million in funding with repayment terms of up to 25 years.
Celtic Bank doesn’t specifically outline the criteria for qualifying for SBA or non-SBA business funding. Instead, you’ll need to start the application process online or by calling a toll-free number. Once you’ve done that, you’ll connect with a lending specialist who will review your loan options and specific requirements, such as minimum credit score, revenue, and time in business.
7.) JPMorgan Chase Bank
JP Morgan Chase Bank N.A. — or simply Chase Bank as it’s known to its customers — is one of the nation’s “Big Four” banks. Established over 200 years ago, Chase Bank has around 5,000 branches nationwide to provide personal, business, and commercial banking services to consumers and business owners. This financial institution is also one of the top SBA lenders in the country.
Through Chase Bank, you can choose from several SBA loan products. For most purposes, there’s the 7(a) loan. For expansion or improvements to your business, you can receive as much as $12.5 million through the 504 loan program. Chase Bank also offers SBA Express loans up to $350,000. Chase Bank will also provide relief for business owners affected by COVID-19.
As with all other SBA loans, you must meet credit requirements. You must also meet additional criteria, such as qualifying as a small business. To learn more about how to qualify for an SBA loan and which product is best for your business, visit your local Chase branch to get started.
8.) U.S. Bank
U.S. Bank has been providing financial services since 1863 when it was known as First National Bank of Cincinnati. Throughout the years, the bank expanded, and after multiple mergers, it has become the U.S. Bank we know today. This bank is one of the top five in the nation and provides a variety of financial products for consumers and businesses of all sizes. One of the ways that it helps its small business customers is through the issuance of SBA loans.
U.S. Bank is a servicer of three popular SBA loan options. The SBA 7(a) Business Loan provides up to $5 million with repayment terms of up to 10 years. The SBA 7(a) Real Estate Loan provides up to $7 million with repayment terms of up to 25 years. Finally, the 504 loan program provides loans up to $11.25 million with repayment terms of up to 25 years.
All borrowers must meet business and credit requirements to qualify. Requirements for SBA loans are less stringent than those of U.S. Bank’s other business loan products. To learn more about how to qualify, visit your local U.S. Bank branch, or you can start the process by filling out the bank’s online form.
KeyBank is another one of the largest banks in the US, with over 1,000 branches and business offices scattered across 39 states. The bank was founded as Commercial Bank of Albany, New York, nearly 200 years ago. This bank is headquartered in Cleveland, Ohio, and provides financial services nationwide for consumers and businesses.
Small business owners can turn to KeyBank for SBA loans. KeyBank offers SBA 7(a) loans up to $5 million, 504 loans up to $12 million, and Express loans up to $350,000. You can also apply for a Working Capital CAPline to receive up to $1 million as a flexible line of credit.
If you want to expand your operations to international markets, KeyBank has SBA International Trade Lines up to $5 million for the purchase of equipment, real estate, or working capital to help you take your business worldwide. Another option is the SBA Export Express, which provides loans and lines of credit up to $500,000 for export development.
Finally, if you need a smaller loan, consider applying for KeyBank’s 7(a) Small Loans, term loans that are available up to $350,000.
One thing to note is that KeyBank provides SBA loans to borrowers in Alaska, Colorado, Connecticut, Idaho, Indiana, Maine, Massachusetts, Michigan, New Jersey, New Hampshire, New York, Ohio, Oregon, Pennsylvania, Utah, Vermont, and Washington. If you’re located in another state, KeyBank has other business financing options. To learn more and to apply for SBA funding, call or visit an SBA specialist at your local branch.
10.) ReadyCap Lending
ReadyCap Lending is a non-bank SBA lender that has been helping small business owners since 2012. This lender is an SBA Preferred Lender, so the application and funding process is more efficient.
Through ReadyCap Lending, you can receive up to $7 million through the 7(a) program. There is also a loan program for veterans that provides funding of up to $5 million. Both of these options have repayment terms of up to 25 years. To qualify for any of ReadyCap’s SBA programs, you must have strong personal credit and a debt service coverage ratio (DSCR) of 1.15 to 1.30. You must meet other requirements as well.
ReadyCap Lending is also an approved lender for PPP loans to help small businesses that have been affected by the coronavirus.
To learn more about this lender, check out our ReadyCap Lending Review. For more information or to start the application process, you can submit a request through ReadyCap’s website.
The Best Ways To Get SBA Loans Online
If you’re like most business owners, your plate is too full to spend hours sitting at the bank in an attempt to get an SBA loan. The internet has simplified other areas of business — invoicing, accounting, communicating with customers — so why not put this technology to work for you in your search for a small business loan?
It is entirely possible to secure an SBA loan online. Be aware, though, that even the online process can take time and requires you to complete specific tasks, such as uploading financial reports, filling out applications, and signing documents. Communicating with your lender and completing steps in a timely manner are critical steps to securing an SBA loan.
You can always check with lenders that you have an existing relationship with to see if they offer online loans. Another way to apply for an SBA loan is by using an online marketplace, such as Fundera, Lendio, or SmartBiz, that clearly outlines requirements, rates, and terms and allows you to apply for and receive funding right from your home or office.
5 Tips For Choosing The Best SBA Lender For Your Business
Still unsure of which SBA lender is right for your business? Consider these five tips to help you narrow down your options.
Tip #1: Talk To Lenders You’ve Worked With In The Past
Instead of blindly choosing a lender that you have no experience with, talk to banks, credit unions, and other lenders you have a pre-existing relationship with. This may cut down on the amount of paperwork you have to submit (e.g., bank statements). If these lenders don’t offer SBA funding, they may be able to point you in the right direction.
Tip #2: Make Sure You Meet All Requirements
Few things are more disappointing in business than having your loan application rejected. To avoid this problem, make sure that you (and your business) meet all requirements for receiving an SBA loan. Most lenders require at least two years in business, with the tax returns to back it up.
You should also have a solid credit score. In most cases, this is around 680, but some lenders may consider lower scores. You should also have enough revenue to pay back the loan, as well as enough money to cover a down payment if required. Some lenders also look at your DSCR as well as your debt-to-income ratio. You must also meet the requirements of a small business as set by the SBA. This limits the number of employees you have as well as your annual revenue.
Tip #3: Determine Which Type Of Loan Is Best For You
For most borrowers, the SBA 7(a) loan offers high limits and can be used for nearly any purpose, making it a solid choice for many businesses. However, there may be other loan options that are better suited for your needs. For example, maybe a line of credit is a better choice than a loan that comes in one lump sum. Maybe your business has smaller needs that could be met with an SBA microloan. Or perhaps you’ve faced an economic loss due to a disaster in your area. Every business is different, and so are your financial needs. Make sure to explore all SBA funding options and choose a lender that offers the product that’s the best fit.
Tip #4: Experience Matters
While many lenders offer SBA loans, not all lenders have the experience needed to help you through the process efficiently. Choose an SBA Preferred Lender that has experience in these types of loans to ensure that you get your funding as quickly and easily as possible. You may even want to take it a step further and choose a lender that has experience with your specific industry.
Tip #5: Look For Lenders With Multiple Product Offerings
Work with a lender that offers SBA loans, lines of credit, equipment financing, or other financial products. If you don’t qualify for an SBA loan, you may qualify for other forms of financing. Or, if you need capital now and don’t have weeks (or longer) to wait for SBA funding, make sure that your lender has other options or can at least refer you to other institutions that are a better fit.
Found The Best SBA Lender For Your Small Business? Learn How To Apply For An SBA Loan
Have you found an SBA lender (or two) that seems like the right pick for your business? Great! That’s one step you can check off your checklist. The next step is to dive into the application process. Before you get started, note that this can be a drawn-out process, so make sure you’re ready to invest the time needed to close your loan efficiently. At any time, your lender could reach out during the process for more information or documentation, so be ready to respond.
It also helps to make sure that you have all of your financial records and documentation in order. Check your credit score and history, review your annual revenue, and make sure that you’re aware of SBA small business guidelines before you get started. Learn about other ways that you can strengthen your business loan application.
These are just a few tips to get you started. Check out our post How To Apply For An SBA Loan: The Complete Guide for a more thorough explanation of what to expect during the application process. The process can be daunting, but the low-cost loans at the end are well worth the work you put forth. Good luck!
Again, if you’ve arrived at this post because your business has been affected by the COVID-19 pandemic, we’ve got resources on business lending for you. Check out our full Coronovirus hub for small businesses. We cover a variety of topics that are affecting small businesses, including What SBA Disaster Loans Are & How To Qualify For One and Small Business Loan Resources & Guides for Businesses Affected By The Coronavirus.