What are Certified and Preferred SBA Lenders?

Adapted from the U.S. Small Business Administration Web site.

The SBA works with many banks to provide small businesses with financing. This opens up funding opportunities for companies that may not qualify for bigger loans from venture capitalists or angel investors. Read our guide to Bank Loans for Small Businesses, which lists some of the key elements that a bank looks for in a good loan applicant.

The most active and expert SBA lenders qualify for the SBA's Certified and Preferred Lenders Program. Participants are delegated partial or full authority to approve loans, resulting in faster service to the applicant.

Certified lenders are heavily involved in regular SBA loan guarantee processing, and they meet certain other criteria. They receive a partial delegation of authority and get a 36-hour turnaround on loan applications; they may also use regular processing. Certified lenders account for 10 percent of all SBA business loan guaranties.

Preferred lenders are chosen from among the SBA's best lenders and enjoy full delegation of lending authority. This authority must be renewed at least every two years, and the SBA will periodically examine the lender's portfolio. Preferred loans account for 18 percent of SBA loans. For more information about specific certified and preferred lenders in your area, contact your local SBA office.

You might have to do some additional research to determine what kind of loan might fit your business. Read What Type of Small Business Loan Do You Need? for an overview of the options.