SBA Lending: Loan Product or Strategy?

What new loan program can you install and make it profitable in the first year? Think SBA lending!

Most lenders exploring SBA lending for the first time have never imagined that offering SBA loans could be anything other than just another loan product. Let SBA Advisors broaden your perspective! SBA lending could be your roadmap to increased profitability.

With over twenty years of consulting and setting up new SBA lending platforms, it has always been our goal to maximize all that this loan program can do for the success of your lending institution.

What a Successful SBA Lending Program Can Offer:

1. Expand your expertise in lending to small business with limited risk, given the government guaranty.
2. Cultivate a significant competitive edge for your lending institution.
3. Keep your valuable customers happy by making SBA loans available when your conventional credit policy won’t let you lend to them.
4. Offer longer term loans. The average term for most SBA loans is over seven years with a maximum of 25 years, depending on collateral.
5. Increase Loan Volume. When you begin to market SBA lending, be prepared for loan growth in your conventional loans, as well. With more customers come increased deposits and even more retail opportunities.
6. Boost income and improved earnings. The secondary market for SBA loans is well established. While it varies from year to year, it can produce an average yield of over 25% in the first year and 6% or better in the following years. This income is treated as first-tier capital.
7. Increase liquidity. Almost loaned up? Instead of offering higher CD rates to attract money, why not just sell your SBA loans?
8. Improve lending limits. For smaller banks, the amount of the SBA guaranty extends your legal lending limit allowing you to attract larger customers and not lose out to the competition down the street.
9. Fulfill CRA Requirement more easily. SBA loans will help the bank meet CRA quotas.
10. SBA loans that are not sold can be used as collateral for Treasury funds.
11. Improve Loan-to-Deposit or Loan-to-Capital ratios.

All the above can be utilized to position the bank for maximum value to your shareholders.