October 21, 2024
Adam Hoeksema
Clients often ask me, “Do I really need a loan broker to get an SBA loan?” Back when I was Executive Director at Bankable, where we approved over 1,500 SBA loans, I found that brokers sometimes added an extra layer between me and the borrower, making the process feel more complicated than necessary. I always preferred working directly with clients to get deals done efficiently.
However, since transitioning to helping businesses through ProjectionHub, I’ve seen just how challenging it can be to find the right SBA lender. It’s not as simple as picking a bank—each lender has different preferences and processes. That’s when I started to appreciate the value of SBA loan brokers. They know how to cut through the clutter and match businesses with the right lenders.
The truth is, not all lenders are interested in the same kinds of loans. Some prefer larger loans, others focus on niche industries. I’ve worked with many qualified clients who spent months searching for a lender, only to keep hitting dead ends. That’s where a broker can be a game-changer—they’ve already built relationships with lenders and can help connect you with the right one.
A good SBA loan broker doesn’t just pass your application along. They become an ally who understands your business and guides you through the complexities of SBA loans. The best brokers use their experience and networks to find lenders who are the best fit for your specific needs, whether you’re in a niche industry or need a smaller loan.
When choosing an SBA loan broker, focus on three key factors: experience, a strong network, and clear communication. A broker with a solid track record will know how to navigate the process smoothly. Their connections with lenders who specialize in your industry or loan size will save you time, and their transparency will ensure you stay informed throughout the process.
So, when is it a good idea to use a broker? If you’re new to SBA loans, a broker can guide you through the process and help avoid mistakes. If you’ve had trouble getting approved, they can connect you with a lender who’s a better fit. And if your loan request is more complex, a broker’s expertise will help you navigate the challenges more easily.
How much does an SBA loan broker cost?
Here is the good news, SBA loan brokers are “free” to you as the business owner typically. The SBA lender will likely pay the loan broker a fee for bringing them the loan if the loan closes. So there probably won’t be any out of pocket costs for you to use an SBA loan broker.
If you're considering applying for an SBA loan, it's essential to have all your documentation ready. Not sure if your SBA loan application is on the right track? Get an SBA Loan Checklist from professionals who can help ensure you’re meeting the requirements before you submit your application.
If you had asked me years ago, I would have said brokers weren’t necessary. But now, after working with countless business owners through ProjectionHub, I’ve seen how valuable they can be.
Ultimately, the decision to use a broker comes down to how comfortable you are with the SBA loan process and how much time you’re willing to spend finding the right lender. If you’re experienced with the SBA loan processes, you may not need one. But for many business owners, a broker brings much-needed expertise and connections that make the entire process smoother and faster.
