SBA For Lenders: Application Through Closing

The SBA loan application process is more comprehensive in comparison to conventional loans, but that doesn’t mean it has to be difficult. As a lender service provider, our goal is to make SBA lending as efficient as possible for you and your small business clients. Our process starts with determining SBA eligibility up front, so that you can focus on customers with the highest likelihoods of SBA approval.

This article provides an overview of what to expect during the SBA loan application process. If you’re not a Prudent Lenders client yet, learn how we help institutions like yours better serve their communities and small business clients.

Fast Track Assessment

When it comes to SBA lending, the sooner a lender can determine a prospective borrower’s SBA eligibility, the better. To help, we created the Fast Track Assessment (FTA) – our proprietary SBA loan-screening tool that determines SBA eligibility and provides the information you need to decide whether or not to move forward with a deal. Within 48 hours of receipt of an required documents, we’ll provide you an FTA and proposed loan structure.

Underwriting checklist

Once you commit to pursue a loan request, we prepare an underwriting checklist that outlines the necessary documents and forms that are needed for underwriting. The checklist details the items needed for underwriting and ensures all parties are aligned in what needs to be provided to move forward.

Underwriting

Upon receipt of the complete list of required items in the checklist, underwriting commences.  The FTA evolves into a full credit memo during underwriting so you and your borrowers are able to move through the application process swiftly. We commit to provide questions within 5-7 days. With responses in hand, we finalize a credit memo for your approval within another 3 days.

SBA submission

Prudent Lenders handles all communication with the SBA on your behalf. Prior to submitting a loan package, we perform a final quality-control review to ensure compliance with SBA requirements. It’s important to note, too, that you need to include the following required signed forms:

• SBA 1920: Lender Application for SBA Loan Guaranty: This is a form our team will fill out based on the specifics of the loan application and forward to you for your signature.
• SBA 1919: Borrower Information Form
• SBA 159: Lender Fee Disclosure Form and Compensation Agreement.
• Credit memo.

For lenders with Preferred Lenders Program status (PLP), we can obtain an authorization number from the SBA on your behalf earlier in the process.

Closing

Once a loan is approved by the SBA, our legal team is here to walk you through the SBA loan closing process. We coordinate the closing and funding of every loan and are here to provide support until the loan is fully disbursed throughout the SBA loan disbursement process. Clients can expect the following steps to ensure a smooth closing process for each loan:

Kick-off Call

The closing process starts with a kick-off call, coordinated by Prudent Lenders. Here, we’ll walk you, your client and the attorney who will work on the closing through the closing process. We use this time to answer questions you or your client may have. We also provide a closing checklist and collect any additional documents or signatures needed to close.

Documents and due diligence 

Next, our team completes all pre-closing searches and filings and manages the collection of any due-diligence or other loan-related documents that are needed to close the loan. We also analyze all necessary documents when equity is involved.

Once all items have been reviewed and approved, a date is set and our team will coordinate the actual closing/funding of the loan, including multiple disbursement files. We’re also here to help you make required loan amendments as needed, including:

• Changes to a loan amount
• Payment structure
• Collateral and
• Use of proceeds

Following closing, our servicing and special assets teams are here to oversee your loan throughout its lifetime. Our comprehensive process ensures complete oversight and maintenance of your SBA loan from loan processing through servicing.

Your partners in SBA lending

If you’re an existing Prudent Lenders customer and have questions or need more information, contact us today. And if your lending institution isn’t part of the Prudent Lenders community, we encourage you to learn about how easy we make it to offer SBA loan programs, without the cost and time commitments associated with operating your own in-house SBA department.

Prudent Lenders is powered by two of the nation’s largest SBA lenders.  Together, we offer the most efficient and knowledgeable team in the SBA lender-servicing community. Test our process for free with a complimentary loan-eligibility screening and see for yourself how partnering with Prudent Lenders saves you time and money.