Join Gregory Young - SBA Lender @ First Savings Bank and Alex McAloon - CEO @ FastwaySBA as we break down the secrets to SBA loan approvals.
Transcript:
00:03.879
Greg Young: Hi, I’m Greg Young with First Savings Bank. I’ve been in banking for 21 years, with the last seven years focused specifically on SBA 7(a) financing. We provide SBA 7(a) financing across the country, serving all industries. I started my career in New York City and am now based in Dallas, Texas, so I have a solid understanding of various markets and customer needs.
00:30.199
Alex McAloon: Thanks for joining us today, Greg. In your seven years of experience with SBA lending, you’ve likely seen a lot of differences in how banks approach underwriting and approvals. Why would one lender approve a loan while another declines it?
00:50.719
Greg Young: That’s a great question. SBA lending is guided by the SOP (Standard Operating Procedures), which serves as a baseline for all lenders. It’s about as loose as the standards can get. However, banks have their own internal guidelines within the SBA framework, and these guidelines can vary widely based on their experience and appetite. Some banks focus more on collateral, while others prioritize cash flow. Preferences can also depend on industries, geographical locations, or even the experience of the banker and how well they package and structure the deal for underwriting.
01:31.280
Alex McAloon: That makes sense. Are there any universal “yeses” or “nos” in SBA lending?
01:45.000
Greg Young: Not really, beyond the basics like the borrower being a permanent resident or U.S. citizen. Other than that, every bank is different. Some banks are open to startups or construction loans; others focus solely on business acquisitions or real estate deals. The diversity of the SBA program is what makes it so beneficial.
02:09.280
Alex McAloon: Have you noticed any significant changes in SBA lending, either due to COVID or shifts in the SOP?
02:20.440
Greg Young: Yes, there have been changes to both the SOP and banks’ risk appetites. During COVID, the CARES Act brought a lot of attention to SBA lending, making it more mainstream. Programs like PPP and EIDL were excellent marketing for the SBA, and more people now understand its value for small businesses borrowing $5 million or less.
02:50.400
Alex McAloon: Absolutely. COVID programs like PPP really did a lot to improve perceptions of the SBA. That said, SBA processes can still vary by bank—some are heavily paperwork-intensive while others are not. Would you agree that working with an SBA expert can make a big difference?
03:07.560
Greg Young: Absolutely. Working with someone who specializes in SBA lending is crucial. The process involves additional documentation, so having an expert who understands the nuances and guides you through it is invaluable.
03:25.680
Alex McAloon: Have there been changes regarding collateral, cash flow requirements, or down payments?
03:38.080
Greg Young: Yes, particularly with down payments. While 10% down is common, some situations—like certain real estate transactions—allow for no money down. For example, rent replacement or second-location expansions may qualify for 100% SBA financing.
04:02.519
Fastway SBA: Apply today at FastwaySBA.com.
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