Choosing the best SBA lender can save you time and can increase your funding chances, but there are over 3,000 banks and credit unions nationwide who offer SBA loans. In this article we review three of the best SBA lenders today, all of which are part of the SBA Preferred Lenders Program: Wells Fargo, JPMorgan Chase, and Huntington National Bank.
SBA loans can routinely take 45 – 120 days to fund with a traditional bank. If you’re looking for a faster solution, we recommend applying for an SBA loan with SmartBiz. You can pre-qualify in minutes, and SmartBiz can get you funded for up to $350K in working capital, or $5 Million for commercial real estate. To qualify you need to have at least a 680 credit score, 2+ years of business history, and a 10% down payment.
Best SBA Lender 2017
|Wells Fargo||Chase Bank||Huntington Bank|
|Average SBA Loan Amounts|
|Minimum Credit Score to Qualify|
|Average Time to Get Funded|
|30-60 Days||30-60 Days||45-60 Days|
|Amount of SBA Funding in 2016|
*Last Updated: October, 2017
Best SBA Lender for Small Businesses: Wells Fargo
We recommend Wells Fargo as the best SBA lender for small businesses because they give out more SBA loans, and lend out more money than any other lender in the country. And they do it consistently, with mainly happy customers. Wells Fargo is one of the most active SBA lenders in the nation, often ranking as # 1 in the SBA’s quarterly ranking of top SBA lenders.
Wells Fargo provides SBA 7a loans from $10K – $5 million, and their average SBA loan size was almost $300K in 2016. This is larger than both Huntington and Chase, but is still low enough to accommodate the financing needs of most small businesses. Wells Fargo also funds a fair amount of startup businesses and business acquisitions, which is something that many lenders don’t do.
Wells Fargo has the experience necessary to deal with small businesses of all sizes, and they’re available in all 50 states. They loaned more than double the amount of money through SBA loans than any other lender in 2016, and are unquestionably the leader in SBA lending. Additionally, they’re fast to fund for a PLP lender, typically getting you funded in 30-60 days.
Best SBA Lender for Startups & Newer Businesses: Chase Bank
Chase Bank is constantly at the top of the SBA’s rankings of lenders based on the amount and number of loans they give out every single year. They’re an experienced lender that compares favorably to Wells Fargo. Chase works with a lot of startups and newer businesses for their SBA loan program. While many lenders require at least 2 years of business history to make an SBA loan, Chase will work with any small business regardless of how long it’s been operating.
They’re very comfortable in the small business space, and often top the list of the best banks to work with for traditional small business loans. In fact, last year they launched a loan program in partnership with our recommended short-term business loan provider, OnDeck, to target small businesses who have unfulfilled credit needs. Programs like these should make the small business owner very comfortable with partnering with Chase Bank.
The actual loan you get from Chase Bank will be similar to most traditional banks. You need at least a 680 credit score to qualify, and they offer 7a loans, Express loans, and 504 loans for commercial real estate.Getting an SBA loan from Chase Bank will typically take 45 – 90 days.
Best SBA Lender for the Upper Midwest: Huntington National Bank
Huntington National Bank does a large amount of SBA loans every year, constantly ranking in the top 3 in the country. This is remarkable considering they only operate in eight states (Illinois, Indiana, Kentucky, Ohio, Michigan, West Virginia, Western Pennsylvania, and Wisconsin). From 2008 through 2016, they were number one in the region, and made 1,821 SBA loans in 2016, second nationally only to Wells Fargo.
Huntington National bank focuses on smaller SBA loans than Wells Fargo or Chase Bank, with an average SBA loan size of $185,237. If you live in the upper Midwest they are the right lender to go to, because they do way more SBA loans per branch location than the competition. They have over 1,300 locations, but both Wells Fargo and Chase Bank have well over 5,000 locations nationwide.
Huntington offers SBA loans from $5k to $5 million, and will connect you with a local SBA advisor to walk you through the application process within a few hours. This is the fastest process of the banks we’ve reviewed in this article.
Other SBA Financing Sources & When to Use Them
While the three banks we review in this article will be great for most small businesses looking for SBA loans, there are situations where you may need a different solution. For example, if you’re operating in a very niche industry you may find it difficult to get funded unless you work with a lender that is familiar with how your industry operates.
Use an Online SBA Loan Platform
All of the best SBA lenders in this article are traditional banks, which can have lengthy application processes and be hesitant to work on deals under $350K. If you’re looking for something faster than 45 – 90 days, then we suggest leveraging an online SBA loan platform to help streamline the process. SmartBiz, our recommended SBA loan provider, provides quick and easy access to SBA working capital loans of $30k – $350K and commercial real estate loans from $500K – $5MM.
There are three main reasons that you may want to use an SBA lending platform instead of going directly to the bank:
- Speed & Convenience
- They Increase Your Odds of Getting Approved
- Excellent Customer Service
Normally, bank loans require lots of paperwork, take over 30 hours of a business owner’s time, and close in 3-4 months. SmartBiz shrinks this down to about 15 hours and typically close in 30 days or less. Their initial online application process takes just a few minutes. When we at Fit Small Business applied for a loan, we finished the online application in half an hour and received a pre-approval email right away. After that, a SmartBiz rep asked us for supporting documents, submitted our loan package to a partnering bank, and helped us with the lender’s underwriting and closing processes.
We were able to obtain funding through SmartBiz after getting turned down by 5 banks, and we have seen this happen with many of our clients as well. How can this be? SmartBiz is a technology provider that makes SBA lending easier for both the small business owner and the lender. SmartBiz has facilitated over $500 million in funded SBA loans which makes them a top player in the SBA lending space.
Work With An Industry Specific SBA Lender
If you find yourself in a very specialized industry then you may increase your approval chances by using a specialized lender focused on your industry. Live Oak Bank is a great example of this, and they focus on only lending to small businesses in these 12 industries:
- Veterinary Practices
- Family Entertainment Centers
- Funeral Homes
- Investment Advisors
- Wine & Craft Beverages
- Healthcare, Dental, or Ophthalmic Practices
Live Oak provides SBA loans between $50,000 and $5 million. Jason Lumpkin, the bank’s head of eLending, says these industries are traditionally underbanked and typically don’t get favorable terms. At Live Oak, industry experts understand the nuances of what it’s like to be a business owner in that industry and will work to get your SBA loan funded quickly.
In-Depth Overview: Wells Fargo vs Huntington vs Chase
This buyer’s guide covers the best places to get an SBA 7a loan, but each of our recommended lenders also offer SBA 504 loans for commercial real estate. An SBA 7a loan is a government-guaranteed general purpose business loan that can be used for working capital, to renovate a building, to purchase equipment or machinery, or for a host of other uses.
While 7a loans are sometimes given to startups or to people who are acquiring a business, the bulk of SBA loans go to businesses that have been in business for at least two years.
For information on all of the Small Business Administration’s (SBA) loan programs, check out our guide to the types of SBA loans.
Number of Loans & Average Loan Size
Before we dive into the loan details, it’s important to get an overview of what each bank looks like in terms of the SBA loans they give out. It helps paint the picture of how often they make SBA loans, and could impact your likelihood of getting approved.
SBA Loan Amounts by Lender
|Average Loan Size in 2016||# of Loans Given in 2016||Amount of Money Given Through SBA Loans in 2016|
Terms, Rates, & Costs
SBA loans carry very similar terms no matter where you get the loan from. You will see repayment terms of 5, 10 or 25 years, depending on what type of SBA loan you apply for. Standard 7a loans will generally have a 10 year term, while 504 loans generally have a 25 year term. With all three lenders you can get funding for up to $5,000,000 for working capital or commercial real estate.
SBA loan interest rates are roughly equivalent no matter which lender you go to because the SBA sets maximums on the rates that can be charged. Here are other costs that you will have no matter which lender you choose:
Closing costs/third party costs
Appraisal fees (for real estate or business acquisitions), title insurance fees, environmental studies (for real estate), and other third party costs are the borrower’s responsibility. These can be rolled into the loan. Closing costs vary based on the loan size and type.
Some lenders, particularly large banks, require an upfront deposit to cover closing costs. This can be difficult for small business owners who are in a cash crunch.
The SBA requires small businesses to carry key person insurance and other types of insurance when a loan isn’t 100 % collateralized.
SBA-required guarantee fee
The SBA levies a fee of 3 to 3.5 % of the guaranteed amount of the loan. This currently applies only to loans over $150K.
The real distinction among lenders is in other miscellaneous fees, such as referral and packaging fees. The SBA prohibits lenders from charging processing fees, origination fees, application fees, points, brokerage fees, or bonus points. Generally, you can generally expect to pay between 4.5% – 11% in fees to process your loan, plus any additional fees your lender may charge.
Below we show the breakdown of what the costs are for each lender for the referral and packaging fees. You can estimate what your own costs would be by using our SBA loan calculator.
How to Qualify
Qualifying for an SBA loan isn’t easy. The requirements generally parallel what you would need for a conventional bank loan, and each lender’s qualifications are nearly identical. You typically need the following to qualify for an SBA 7a loan:
- Good personal credit score (680+) (check credit here for free)
- Business with positive cash flow or (for startups) positive cash flow projections. This typically translates to a Debt Service Coverage Ratio (DSCR) of at least 1 to 1.25.
- Collateral (the loan may not need to be 100 % collateralized, but you should have some collateral)
- 10-20 % down payment if you’re starting a new business or are acquiring a business or real estate.
These requirements are on top of the SBA’s eligibility requirements. Keep in mind that every lender will require a personal guarantee from the primary business owners, and you’ll be required to submit a personal financial statement through SBA form 413 to show what assets you have to back up that guarantee.
Funding Speed & Application Process
The biggest drawback of getting a loan from a traditional bank is how long the application process takes. There is a lot of paperwork involved with an SBA loan, and you need to be prepared to provide the right documentation to your lender if you don’t want to delay the process.
The typical funding time for an SBA loan is 45 – 90 days, or longer. If you’re looking for something quicker than that then we recommend using SmartBiz, who can get you funded in as quick as 30 days.
All three lenders have different funding speeds, but very similar processes. When you apply your process may vary slightly, but typically it looks like this:
- You Apply
- You fill out SBA forms
- Lender request any missing data
- Lender gives you a letter of intent with loan terms
- You accept and pay a deposit
- The lender processes your loan and gets the SBA approval
- You get funded
Each of these steps can be slowed down based on how prepared you are, and what documentation is missing that the lender needs to make a lending decision. You can read our article on how to apply for an SBA loan to learn more. Let’s look at how fast each of the best SBA lenders can get you funded.
Types of SBA Loans Given
The SBA has six different loan options available, and each lender offers different amounts of them. It’s common for many lenders to offer the SBA 7a and 504 loans at a minimum. All other SBA loan offerings depend on the lender, because the other programs aren’t typically used as often.
States They Lend In
It’s important to know, before you apply, whether or not a lender can even loan you money in the state you reside in. National banks, like Wells Fargo and Chase, often beat out smaller banks based on how much SBA loan money they give. While Chase and Wells Fargo are both national banks who loan a lot of SBA money, they give very few loans per branch location. Neither funded even one SBA loan per branch in 2016. Keep that in mind when deciding between a national or regional lender.
Top 100 SBA Lenders
|Average Loan Amount||Loans Approved (2016)||Amounts Approved (2016)|
|Wells Fargo Bank, National Association||$298,550||2,810||$838,926,600|
|Live Oak Banking Company||$1,292,453||549||$709,556,900|
|The Huntington National Bank||$185,237||1,821||$337,315,900|
|JPMorgan Chase Bank, National Association||$203,635||1,497||$304,842,300|
|U.S. Bank National Association||$270,850||1,042||$282,225,700|
|Celtic Bank Corporation||$353,295||738||$260,731,600|
|Newtek Small Business Finance||$849,767||216||$183,549,700|
|Bank of Hope||$701,541||189||$132,591,200|
|First Home Bank||$277,222||476||$131,957,700|
|KeyBank National Association||$435,577||302||$131,544,300|
|Commonwealth Business Bank||$1,193,093||108||$128,854,000|
|Seacoast Commerce Bank||$989,553||120||$118,746,400|
|Bank of the West||$697,651||156||$108,833,600|
|Pacific City Bank||$893,517||115||$102,754,400|
|Pacific Premier Bank||$1,594,852||63||$100,475,700|
|Stearns Bank National Association||$302,412||328||$99,191,000|
|Manufacturers and Traders Trust Company||$152,202||649||$98,779,400|
|TD Bank, National Association||$142,948||648||$92,630,000|
|First Financial Bank||$673,023||128||$86,147,000|
|Metro City Bank||$1,512,889||53||$80,183,100|
|BankUnited, National Association||$837,195||92||$77,021,900|
|United Community Bank||$771,474||96||$74,061,500|
|Pacific Western Bank||$1,534,304||48||$73,646,600|
|First Bank Financial Centre||$787,376||89||$70,076,500|
|Bank of America, National Association||$579,557||114||$66,069,500|
|First National Bank of Pennsylvania||$560,399||108||$60,523,100|
|Fifth Third Bank||$369,584||159||$58,763,900|
|East West Bank||$510,676||113||$57,706,400|
|Harvest Small Business Finance, LLC||$1,609,523||35||$56,333,300|
|First Savings Bank||$1,087,280||51||$55,451,300|
|First Intercontinental Bank||$849,856||59||$50,141,500|
|Banc of California, National Association||$1,293,174||34||$43,967,900|
|Midwest Regional Bank||$809,917||54||$43,735,500|
|Readycap Lending, LLC||$999,631||42||$41,984,500|
|Hana Small Business Lending, Inc.||$640,031||65||$41,602,000|
|First-Citizens Bank & Trust Company||$808,098||51||$41,213,000|
|CenterStone SBA Lending, Inc.||$1,403,862||29||$40,712,000|
|Spirit of Texas Bank, SSB||$292,546||136||$39,786,300|
|New Millennium Bank||$862,228||46||$39,662,500|
|Zions Bank, A Division of||$238,039||164||$39,038,400|
|Citizens Bank, National Association||$115,718||334||$38,649,700|
|West Town Bank & Trust||$1,318,148||29||$38,226,300|
|MUFG Union Bank, National Association||$1,469,738||26||$38,213,200|
|Bank of George||$1,706,123||22||$37,534,700|
|The Bancorp Bank||$663,793||54||$35,844,800|
|Branch Banking and Trust Company||$424,365||84||$35,646,700|
|US Metro Bank||$855,758||40||$34,230,300|
|State Bank and Trust Company||$645,215||53||$34,196,400|
|First Chatham Bank||$1,423,054||24||$34,153,300|
|United Midwest Savings Bank||$779,033||43||$33,498,400|
|Royal Business Bank||$1,269,269||26||$33,001,000|
|T Bank, National Association||$2,254,500||14||$31,563,000|
|Green Bank, National Association||$1,971,513||16||$31,544,200|
|Fulton Bank, National Association||$843,949||37||$31,226,100|
|Wallis State Bank||$929,370||33||$30,669,200|
|First Choice Bank||$1,303,735||23||$29,985,900|
|Mission Valley Bank||$1,739,653||17||$29,574,100|
|Rock Canyon Bank||$1,087,904||27||$29,373,400|
|The MINT National Bank||$1,938,233||15||$29,073,500|
|PNC Bank, National Association||$176,869||160||$28,299,000|
|United Business Bank, F.S.B.||$1,644,875||16||$26,318,000|
|First Community Bank||$1,245,757||21||$26,160,900|
|First Western SBLC, Inc||$2,166,917||12||$26,003,000|
|Firstrust Savings Bank||$1,010,575||24||$24,253,800|
|Plains State Bank||$2,127,400||11||$23,401,400|
|The Bridgehampton National Bank||$894,231||26||$23,250,000|
*Last Updated: August, 2017
**Updated Quarterly via SBA
Bottom Line: Best SBA Lender
Wells Fargo is our recommended SBA lender because they’ll likely be the best option for the needs of most borrowers. They routinely give out the most money and do the most SBA loans throughout the country, and can lend nationwide. Huntington is a great option if you live in the upper midwest, and Chase is a good alternative if you’re a startup. If you qualify, then you really can’t go wrong with any of them.
If you need SBA financing quickly, then you should use SmartBiz, who we partnered with on our own SBA loan. They provide SBA loans up to $350K for working capital and up to $5MM for commercial real estate. The best part is that they offer the fastest way to get an SBA loan that we’ve seen, getting you funded in weeks instead of months.