By Jason Moxness, Market President, Core Bank Loan Production Office
We’re excited to announce that as of July 19th Core Bank received notification from the SBA that we are officially approved to participate in the Preferred Lenders Program (PLP)!
What is the SBA Preferred Lenders Program?
In an effort to streamline the loan approval process and to answer the demand for small businesses to obtain capital, the SBA designed the Preferred Lenders Program. Under the PLP program, the SBA delegates the final credit decision as well as servicing and liquidation authority to a select group of qualified lenders.
What is the process to become an SBA Preferred Lender?
Lenders must submit an application to their local SBA office who then nominates them and sends the application off to Washington for final consideration and approval. Lenders who have demonstrated a proficiency in processing and servicing SBA guaranteed loans, and whose portfolio is in good standing with the SBA, are considered for this program. Additionally, the SBA looks closely at the direct experience of the individuals that are involved in the program.
The process to become a PLP lender can take several years. Core Bank’s participation in the SBA program over the past several years, and our recent addition of a dedicated SBA Department allowed us to qualify for the Preferred Lenders Program.
What does this mean for Core Bank?
We now have full authority granted by the SBA to originate and authorize the approval of every loan program under the 7(a) policy up to the SBA maximum loan of $5 million. We don’t have to perform a secondary approval process of sending the loans to the SBA for review. This means that we have the ability to approve SBA loans locally, saving 3-4 weeks in the decision making process.
It puts Core Bank in an elite class of SBA Lenders.
Does this mean we will approve every loan?
No. We’ll do everything possible to protect the integrity of the SBA program and the safety and soundness of Core Bank. We’ll use our new delegated authority appropriately for only those small businesses that will be both good for Core Bank and for the SBA. Our SBA loan portfolio will be closely monitored by the SBA. Our PLP authority will need to be renewed on a consistent basis to ensure compliance with the SBA program.
What does this mean for Small Business Clients?
This gives clients the confidence to know that their loan is being processed and serviced by an experienced group of local SBA experts who have the authority to grant the final approval on their SBA loan requests. It reduces the time, hassle and potential stress of the additional step of waiting for the approval and inevitable questions from the SBA.
If you or someone you know is interested in learning more about how the SBA program works, please give us a call!