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What is the Difference Between SBA Preferred Lenders and Certified Lenders?

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What is the Difference Between an SBA Preferred Lender and an SBA Certified Lender?

You may have seen a listing of banks in your area with designations such as "SBA Preferred Lender" or "SBA Certified Lender." If you can find an SBA Certified or Preferred Lender in your area, your loan can get processed faster and with less trouble. In case you are wondering what the difference is and which provides the services you need for a business loan, here is a review of the two designations:

SBA Certified Lenders
The SBA Certified Lenders Program includes banks and other lenders who have a track record of following SBA procedures and success with SBA-guaranteed loans. By following these procedures, the lender can receive faster loan turn-around from the SBA, who makes the final credit and eligibility decisions. The expertise of the bank's loan officers helps make the SBA process faster and more accurate.

SBA Preferred Lenders
These lenders have the highest level of autonomy the SBA affords to lenders. According to the SBA, Preferred Lender Program(PLP) banks have authority for "loan approval, closing, and most servicing and liquidation authority and responsibility." The SBA set up the PLP to provide expedited service to borrowers who use these lenders. Criteria for a bank to join the PLP include nomination by an SBA Field Agent and:

  • the ability to process, close, servie and liquidate loans;
  • the ability to develop and analyze complete loan packages; and
  • a satisfactory performance history with SBA.

The SBA is not currently providing a list of CLP and PLP banks. The SBA website suggests you contact your local SBA office for a list of preferred lenders and certified lenders in your area.

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