Selling the SBA Loan Programs: How to Build and Strengthen Your SBA Loan Pipeline

It’s challenging for most financial institutions to fund small businesses in start-up phases, with poor credit histories, or that are in “high risk” industries.

When you have borrowers in these situations, or others who fall just short of meeting your traditional lending criteria, you can introduce them to SBA loan programs. This keeps their financing doors open.

In this article, you’ll find several proven strategies to build and strengthen your SBA loan pipeline and help your team effectively sell SBA loan programs.

How to sell SBA loan programs

When looking for financing, borrowers don’t usually come to the table with specific loan products in- mind. Most are simply looking for a loan with reasonable rates and terms.

Knowledge is power. When your team is well-versed in the advantages of SBA products, they’re far likelier to find opportunities for clients who fall shy of your institution’s lending criteria. That’s why building a successful SBA loan program means integrating it with your existing commercial lending program–from internal training through external promotion.

Here are several proven strategies that yield remarkable results:

Ensure your entire team is informed and included

Optimizing SBA opportunities begins well before you meet with your small business customers. It starts the moment you educate your team for SBA prospecting. When everyone works together, it’s much easier to spot potential deals and guide borrowers through the process.

The first, and potentially most important, step in selling SBA loan programs is ensuring your team confidently understands application processes. We recommend you and your team members try completing SBA applications for various and available loan programs before asking clients to do the same. By doing so, you’ll be familiar with the types of information needed, potential challenges your clients might face in applying, and turnaround times for each step.

Market your institution as an SBA lender

If your institution has a marketing team, working with them to build awareness for your SBA loan program is imperative. This is because many SBA borrowers self-select out of the application process when they don’t believe they qualify for traditional loans and are unaware of alternatives. Basic marketing about the SBA program can help you avoid this pitfall for your clients.

When your marketing team is well-versed in the benefits of the SBA program, you can ask that they integrate SBA loan marketing into ongoing initiatives. Here are some ideas to get started:

• Highlight SBA programs in mailers and statement stuffers
• Include information about your SBA loan options in your emails or online messaging
• Put “SBA Lender” stickers on the doors of your brick-and-mortar branches and offices and use electronic versions for your digital communications
• Encourage your team to tell clients about SBA funding options when business accounts are opened, even if your clients aren’t looking for immediate funding
• Share SBA marketing collateral throughout your branches and ensure digital communications are readily available
• Add information about SBA loan options to your institution’s commercial-banking web pages
• Participate in local events targeted to small business owners and attend SBA networking events in your region

Train your team to highlight how the SBA programs benefit borrowers

SBA programs are a win-win for both borrowers and lenders. Evaluating how the SBA program benefits borrowers from your client’s point-of-view is essential, especially when you can genuinely bolster their confidence in the SBA loan products if traditional financing is unlikely.

Here are several benefits to highlight:

• SBA loan options make it possible for small business owners to get approved even if they don’t have enough collateral, time in business, or credit scores to get approved for conventional loan products. This is because the SBA offers lenders a credit enhancement, in the form of the SBA guarantee, that reduces some of the typical risks associated with lending to small businesses.
• SBA loans provide affordable monthly payments. They include competitive, fixed, or variable interest rates and extended repayment terms (up to 10 years for working capital and up to 25 years for real estate).
• The SBA has an excellent reputation for small business support. In FY2018, the SBA approved 60,353 7(a) loans (the SBA’s most popular program, but also just one of several available options), totaling nearly $24.5 billion.
• SBA-approved borrowers have access to a complimentary network of resources, trainings and mentorships.
• When your institution is a Prudent Lenders partner, you’re working with an SBA expert who acts as liaison between your institution and the SBA. We make the process easy and efficient for lenders and borrowers—and that’s always a selling point.

Use these tips and tools to sell your SBA loan programs

With these strategies, you’ll be better positioned to leverage lending opportunities and build customer loyalty. Have questions or need more personalized assistance? We’re just a phone call away.