Best Practices: Choosing the Right Lender Service Provider

Who you partner with matters. To choose a competent and superior lender service provider (LSP), we’ve developed the following benchmarks. These criteria can help you feel confident you’re choosing an LSP wisely, with the goal of offering your small business borrowers access to the full suite of SBA products:

Constant compliance

It goes without saying: your SBA guarantee is conditional.  If you’re considering a partnership with an LSP, your organization may not have the in-house resources needed to offer or administer SBA loan programs.  A competent lender service provider will have all the necessary experience and proficiency to ensure your SBA portfolio is sound, meaning your guarantee won’t be compromised. An excellent partner fills in the gaps, complementing your existing resources and staff. Your LSP—and partner—should stay on top of evolving standards of SBA procedures so your portfolio remains compliant.

How can you determine if an LSP is dedicated to SBA compliance?

• Determine how long the LSP has been involved in SBA lending.
• Determine the size of the portfolio they service.
• Take staff size into account and their levels of expertise.

Process: Proven and predictable

Let’s face it; turnover and staff changes are par for the course. It’s likely that your organization has experienced them, and most LSPs will undergo changes in human capital too.  In evaluating an LSP, it’s important to remember that people matter. The culture created by the staff matters.  But what matters most when determining who to partner with for your SBA lending: The process. Ensure your LSP employs a predictable and transparent method for eligibility screening, loan closing and servicing. When process is proven and respected above all else, staff transitions won’t disrupt your ultimate objectives. Your guarantee will remain intact even if your LSP representative goes on maternity leave. Or someone on your team takes a sick day. Both lender and LSP stay on the same page—guarantees intact—even when life inevitably happens.

How can you determine if an LSP employs a proven and predictable process?

• Is their process outlined clearly and available for your reference online? (Are your team’s responsibilities and your LSP’s responsibilities detailed well?)

Know-how

When you work with an LSP to execute a contract, you’re bound together as legal partners. But the long-term success of your partnership may be better determined by how well you collaborate. Practical and educational training is critical to your success when you learn a new skill or take on new assets. And as your provider, an LSP should arm your team with proper information and tools. The top LSPs are teachers. They’re collaborators. And they will equip your team with specialized resources and indispensable advice so you can build a superior SBA program.

How can you determine if an LSP is dedicated to proper training?

• Does the LSP have a culture of explaining the “what” and “why” behind every loan they service for you?
• Does the LSP regard every loan as an opportunity to grow their clients’ practical know-how and general understanding of SBA policy?
• Do they have useful tools and resources available on their website? Is their platform intended to educate and support clientele?

Network

Whether you’re a well-integrated member of the SBA lending community or are only now contemplating whether to offer SBA products to your customers; the finest LSPs will welcome you into their network. This means one of the benefits of their partnership is providing access to the people who know the industry—from a myriad of third-party specialists to the authorities who run the U.S. Small Business Administration. In any situation, your LSP should have your back. And their network of colleagues should too.

How can you determine if an LSP has a well-established network?

• Who does the LSP recommend for life insurance, real estate appraisal, or construction management? Do they have a trusted network of attorneys? Can they vet your approved vendors for SBA adherence?

Why Prudent Lenders?

Let’s end where we started: who you partner with matters. Prudent Lenders focuses on collaborative and successful partnerships, while recognizing our task of bringing expert knowledge, resources and skills regarding SBA lending to the table. When it comes to obtaining and maintaining your SBA guarantee, we’re meticulous and proficient. Are you ready to join our best-in-class network? Contact us today.