By Access to financing is one of the biggest challenges for small businesses looking to grow and expand. The U.S. Small Business Administration (SBA) plays a crucial role in helping entrepreneurs secure funding through SBA-backed loans.
One of the fastest and most efficient ways to get an SBA loan is through the Preferred Lender Program (PLP). This program allows certain lenders to approve SBA loans directly, reducing processing time and making it easier for businesses to access capital.
In this article, we’ll cover what the SBA PLP is, how it works, its benefits, and how to find a preferred lender for your business.
What is the SBA Preferred Lender Program (PLP)?
The SBA Preferred Lender Program (PLP) is an initiative that grants select lenders the authority to process, underwrite, and approve SBA loans without requiring direct SBA approval.
Normally, standard SBA lenders must submit loan applications to the SBA for review, which can take weeks. However, PLP lenders can make final credit decisions in-house, leading to faster loan approvals.
Key Features of the SBA PLP:
- Lenders have full authority to approve SBA loans
Reduces SBA loan approval wait times
Increases efficiency for both lenders and borrowers
Only experienced SBA lenders qualify for PLP status
Because PLP lenders are highly trusted by the SBA, they are considered top-tier lenders for small business loans.
How Does the SBA PLP Work?
Lender Selection & Approval
Not all banks and credit unions qualify for PLP status. To be designated as a Preferred Lender, a financial institution must:
- Have a proven track record of successfully processing SBA loans
- Demonstrate strong underwriting capabilities
- Show compliance with SBA guidelines
- Be nominated by an SBA office or request nomination
Once approved, lenders receive PLP status for up to two years, after which the SBA reviews their performance for renewal or revocation.
Loan Processing Under PLP
- With PLP status, lenders can:
Review and approve loan applications without waiting for SBA approval
Process loan applications more efficiently
Issue SBA-backed loans faster than non-PLP lenders
Because the SBA has already delegated authority to PLP lenders, businesses benefit from quicker turnaround times and reduced paperwork.
Benefits of the SBA Preferred Lender Program
Faster Loan Approvals
- Standard SBA loan approvals can take weeks.
- PLP lenders skip the SBA approval step, leading to faster funding.
More Efficient Loan Process
- Less bureaucracy and fewer delays.
- Direct decision-making by PLP lenders improves the borrower experience.
Experienced SBA Loan Experts
- PLP lenders understand SBA loans inside and out.
- Borrowers receive better guidance and loan structuring.
Greater Access to Capital for Small Businesses
- Small businesses can secure financing more easily.
- PLP lenders are more willing to approve SBA-backed loans.
If you’re applying for an SBA loan, working with a PLP lender can save you time and increase your chances of approval.
Types of SBA Loans Processed by PLP Lenders
PLP lenders can approve multiple types of SBA loans, including:
SBA 7(a) Loans (Most Popular)
- Loan Amount: Up to $5 million
Terms: 10-25 years
Uses: Working capital, equipment, real estate, debt refinancing
SBA 504 Loans (For Real Estate & Equipment)
- Loan Amount: Up to $5 million+
Terms: 10-25 years
Uses: Commercial real estate, heavy equipment, land purchases
SBA Express Loans (Fastest Option)
- Loan Amount: Up to $500,000
Terms: Up to 10 years
Uses: Short-term capital needs
Faster processing with approval in as little as 36 hours!
PLP lenders primarily handle 7(a) loans and SBA Express Loans, making them ideal for small businesses needing quick funding.
How to Find an SBA Preferred Lender
If you want to apply for an SBA loan through a Preferred Lender, follow these steps:
Use the SBA Lender Match Tool
- The SBA Lender Match tool helps businesses find approved SBA lenders, including PLP lenders.
- Available on the SBA website.
Contact Local SBA Offices
- Visit your nearest SBA district office for a list of trusted PLP lenders.
- Get personalized recommendations based on your loan needs.
Research Banks & Credit Unions
- Many national and community banks offer SBA loans through the PLP.
- Examples include Wells Fargo, Chase, Bank of America, and local credit unions.
Ask for Referrals
- If you know other small business owners, ask which PLP lender they used.
- Word-of-mouth recommendations can save time and effort.
Choosing a PLP lender ensures a faster and smoother loan process, giving you a better chance of securing funding.
Recent Developments in SBA Lending
The SBA has introduced new initiatives to improve small business lending:
December 2024: Increased SBA 7(a) Loan Limits
- The maximum Standard 7(a) loan increased from $350,000 to $500,000.
- More small businesses can access higher funding amounts.
Expansion of SBA Microloans & Express Loans
- More financial institutions approved for PLP status.
- Greater support for minority-owned and women-owned businesses.
These changes make it easier than ever for businesses to secure SBA financing through PLP lenders.
Conclusion
- The SBA Preferred Lender Program (PLP) is designed to make SBA loans faster, easier, and more accessible for small businesses. By working with a PLP lender, businesses can benefit from:
Faster loan approvals
Less paperwork
Better access to capital
If you’re considering an SBA 7(a) loan or SBA Express loan, choosing a PLP lender can significantly speed up the process and improve your chances of approval.
Would you like help finding the best PLP lender for your business needs?
FAQs
1. What is the SBA Preferred Lender Program (PLP)?
The SBA PLP allows select lenders to approve SBA loans directly, reducing approval times and making it easier for small businesses to secure funding.
2. How does a bank become a PLP lender?
A bank must have a proven history of successful SBA lending, meet strict SBA criteria, and be nominated for PLP status.
3. How do I find a PLP lender?
Use the SBA Lender Match tool, contact SBA offices, or research major banks like Chase and Wells Fargo.
4. Are PLP loans faster than regular SBA loans?
Yes! PLP loans skip the SBA approval step, reducing processing time by weeks.
5. What types of loans do PLP lenders process?
PLP lenders primarily handle SBA 7(a) loans, SBA Express loans, and some SBA 504 loans.
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