One of the most common questions small business owners ask when they are pursuing financing is “Where should I apply for a loan?” The SBDC has some advice.
SBDC Small Business Advisor Gabriel Reyes has been advising clients over the last few years to focus their financing efforts, especially SBA loan requests, with the smaller “community” banks. This table from the San Diego Union Tribune helps explain why:
|Bank||# Loans||Loan Amount|
|CDC Small Business Financial Corp.||72||$40,071,000|
|Wells Fargo Bank||69||$34,453,600|
|JP Morgan Chase Bank||49||$8,531,300|
|Borrego Springs Bank||40||$3,990,500|
|California Bank & Trust||32||$6,117,000|
|Seacoast Commerce Bank||22||$16,079,600|
|U.S. Bank National Association||18||$3,918,500|
|Community Valley Bank||11||$8,667,000|
|Superior Financial Group||9||$80,000|
Reyes has found these banks to be more relationship-based. They often use “make sense” underwriting, meaning that the underwriters may be a bit more lenient on certain issues, such as credit, if there are compensating factors that still make the deal work.
You may have noticed that one of the regions most recognizable banking establishments, Bank of America is not even on this list. The U-T article explains why.
More questions about loan options for your small business? Check out the Small Business Lender’s Forum at the Southwestern College SBDC in National City. This monthly event explains the differences between different SBA Loan programs, alternatives to SBA financing, and what you need to do to prepare to apply.