SBA Lending FAQs: Straight Answers for Brokers and COIs

Is Scale Bank a preferred SBA lender? And what does that even mean?

Yes! Scale Bank is a Preferred SBA Lender. That means we’re authorized to approve SBA loans in-house—no need to wait for SBA approval every time. As a PLP (Preferred Lender Program) lender, we’ve met the SBA’s standards for volume and performance.

While the SBA still performs a quick compliance check, which usually takes just a day or two, deals move much faster.

One bank states that a loan cannot be structured in a certain way, but another claims it can. Aren’t all SBA lenders following the same rules?

You’re absolutely right, all SBA lenders follow the SBA’s Standard Operating Procedure (SOP). But each bank also has its own credit policies, which can lead to differences:

• Some require more equity than the SOP minimum.
• Others may be more flexible with unsecured debt.
• Risk tolerance can vary.

For a business acquisition, what does “translatable experience” mean?

The bank wants to feel confident that the buyer can successfully operate the business. This could mean:

• Direct industry experience, especially in higher-risk sectors like restaurants.
• General management experience for lower-risk businesses.

Ask yourself:

• Have I managed similar budgets?
• Have I led teams of similar size?
• Do I understand the technical or operational side?
• Do I grasp the industry’s outlook?

If the answer to any of these is “not really,” don’t worry. Mitigants can help:

• A transition period with the seller
• Strong existing management
• Targeted training
• A staged or partial buyout

The business I’m selling has declining revenue and profit. Can a bank still finance the acquisition?

It depends. We’ll want to understand why performance is down:

• Is the business shedding a high-risk client?
• Are there signs of long-term viability?

If fundamentals are still solid, we may still do the deal, but it might require:

• A larger down payment
• Seller financing
• A short-term seller-financed period before the bank steps in with permanent funding

How long does it take to close an SBA loan?

It depends on the loan type:

• Business acquisitions: typically 45–60 days
• Working capital or refinances: often quicker

Timelines depend on:

• How quickly documents are provided
• Third-party timelines (e.g., appraisals)
• The deal’s complexity

As a broker, CPA, or M&A advisor, how can I help my client close their loan more efficiently and quickly?

Preparation is everything. Here’s how you can help:

• Get your client’s financials organized
• Update their résumé or LinkedIn
• Encourage quick turnaround on bank requests
• Make sure they know the business they’re acquiring

The more prepared they are, the smoother and faster the process goes.