Between 2006 and 2016, based on data we obtained from the U.S. Small Business Administration (SBA), lenders collectively issued 608,359 SBA 7(a) loans to small businesses. 66 percent of these loans were under $150K. In this article, we share the 100 top SBA lenders for loans under $150K, followed by some tips on how you can get an SBA loan under $150K. Scroll down to see the list.
Why does this data matter? From our experience working with small business owners, getting an SBA loan under $150K is difficult. Many banks that provide SBA loans are reluctant to do smaller loans because they are not that profitable. The bank has to do the same amount of underwriting work for large and small loans but for much less gain on small loans. The list below gives you an idea of which banks are most likely to fund a small business loan under $150K.
100 Top SBA Lenders for Loans Under $150K
# of SBA 7(a) loans under $150K made between 2006 and 2016
% of all SBA loans under $150K issued between 2006 and 2016
Interested in using this data on your blog or site? We gathered this data through a Freedom of Information Act (FOIA) request submitted to the SBA on November 30, 2015 and would be open to sharing the raw data. Please email us and we will consider your request.
Which Lenders Make the Most SBA Loans Under $150K?
The table above shows two important pieces of data: (1) the number of SBA loans under $150K issued by each lender between 2006 and 2016; and (2) the percentage share for each lender of all SBA loans under $150K made between 2006 and 2016. Together, these data points help us evaluate where small business owners stand the best chance of getting an SBA loan under $150K.
The first five banks on the list are the best at making SBA 7(a) loans under $150K. They are Chase, Bank of America, U.S. Bank, Wells Fargo, and Huntington National Bank. For example, Chase, the number one ranking bank, made 43,570 SBA loans under $150K between 2006 and 2016, which equates to more than 4,000 such loans per year. Chase was responsible for making over 10 % of all SBA loans under $150K. That is a pretty significant chunk of small SBA loans.
This means that you’ll generally have a better chance of qualifying for an SBA loan under $150K at one of the first five banks than at a bank farther down the list. Interestingly, the top ranking banks are major national banks, which often get criticized for not making smaller loans. Certainly, the number of smaller loans that these banks make has declined since the 2008 recession, but the data is encouraging. It shows that it is still possible to get a small business loan at a big bank.
5 Tips on Getting an SBA Loan Under $150K
While it can be difficult to get a small business loan, the list above shows that it’s possible. Many lenders provide loans under $150K. Here are a few steps you can take to increase the chances of getting a smaller loan for your business:
1. Apply with SmartBiz
Our recommended SBA lender for loans under $150K is SmartBiz. SmartBiz has streamlined the application process for SBA loans, but you won’t see them on the list above because they are not an SBA lender. Instead, they work with banks to get your SBA loan funded quickly and easily. While large, national banks may offer move borrowers into a more expensive SBA express loan when the request is under $150k, SmartBiz offers traditional 7a loans.
You can get pre-approved online in 5 minutes. If you qualify, SmartBiz will find a bank that is willing to work with you for the loan amount that you need. So instead of filling out dozens of applications with different lenders, you can save time and fill out just one application with SmartBiz. The entire process typically takes two to three weeks.
2. Try Your Local Bank
If you already have a great bank for your business, consider approaching them about an SBA loan. For example, if you already have a small business checking account with your local bank, ask them about an SBA loan. They may be willing to consider a smaller than usual loan request to retain your business.
3. Try a Credit Union
There are a handful of credit unions on our list above of the top SBA lenders. Unlike banks, which are for-profit institutions, credit unions are nonprofit cooperatives. They are focused less on maximizing profits and more on retaining their membership and serving the community. As a result, they are often more willing to make smaller loans. That being said, don’t write off the larger players like J.P. Morgan Chase, Bank of America, and U.S. Bank. They are numbers 1, 2, and 3 on our list.
4. Have All Your Paperwork Ready to Go
Having all your loan paperwork ready to go when you approach a lender reduces the amount of work they have to do, so they will be more likely to want to work with you even if you want a smaller size loan. Be prepared to show the lender the latest copy of your business plan with financial projections. You should also have any required SBA loan documents and SBA forms filled out and ready to go.
5. Improve Your Credit Score
If you have a good credit score, you make yourself a more attractive borrower. A bank will be more willing to work with you, even if you want a smaller loan, if you have good credit. If you don’t know your credit score, you can find out for free here. You can improve your credit with simple changes, such as paying bills on time and paying down outstanding debt.
Getting a business loan under $150K is tough but not impossible. To find a lender to work with on your next loan, read our Best SBA Lenders guide. If you’re unsure if you’ll qualify for an SBA loans or would like to explore other options, read Working Capital Loans: The 8 Best Options.