SBA Preferred Lender Program (PLP)
The Small Business Administration (SBA) Preferred Lender Program (PLP) is a program that allows certain banks and other financial institutions to process, approve, and close SBA-guaranteed loans more quickly and efficiently than they could under the standard SBA process. Under the PLP, participating lenders are delegated the authority to make final credit decisions and close SBA-guaranteed loans without prior SBA review. This can result in a faster turnaround time for loan applications, as the lender is able to make decisions and close loans more quickly than if they had to go through the standard SBA process.
To participate in the PLP, lenders must meet certain eligibility requirements, including having a proven track record of successfully underwriting and servicing SBA-guaranteed loans, demonstrating a high level of competence and expertise in SBA lending, and meeting certain financial and operational standards. Lenders that are accepted into the PLP are able to offer a variety of SBA-guaranteed loan products, including the 7(a) and 504 loan programs.
SBA Express Loan Program (aka SBA Fa$trk)
The SBA Express Loan Program (aka FastTrack or Fa$trk) program aims to help small businesses get access to capital more quickly and efficiently by streamlining the loan application process. The program is designed to help small businesses that need financing to start or grow their businesses but may not have the collateral or credit history required to qualify for a traditional bank loan.
Under the FastTrack program, participating lenders are able to offer small business loans with streamlined application and underwriting processes. This can allow businesses to get approved for a loan more quickly than they would under the standard SBA loan process. The FastTrack program is available to businesses that meet certain eligibility requirements, such as having less than $250,000 in annual revenue, being in business for less than three years, and not being able to qualify for a traditional bank loan.
The maximum SBA Express loan is currently $500,000. The pre-Covid limit was $350,000. The credit decision for express loans are made by the lender, and the asserts a 36-hour turnaround time for their approval.
As noted by the SBA loan statistics below, over 91% of all loans are either 7(a) loans created by PLP lenders or Express loans, which can be attributed to streamlined turnaround times and slightly lower interest rates compared with non-PLP lenders.
| SBA 7a Loan Program | Loans | % of Loans | Avg Loan | Avg Rate |
|---|---|---|---|---|
| Guaranty - PLP | 19,446 | 57% | $1,015,292 | 5.18% |
| FA$TRK (Small Loan Express) | 11,442 | 34% | $126,226 | 5.90% |
| Guaranty - Non-PLP | 2,330 | 7% | $1,042,702 | 5.33% |
| Community Advantage Initiative | 329 | 1% | $135,124 | 7.32% |
| Standard Asset Based | 147 | 0% | $1,257,088 | 4.82% |
| Revolving Line of Credit Exports - Sec. 7(a) (14) | 89 | 0% | $2,189,500 | 4.51% |
| International Trade - Sec, 7(a) (16) | 38 | 0% | $2,542,977 | 5.41% |
| Seasonal Line of Credit | 32 | 0% | $1,226,469 | 4.83% |
| Contract Guaranty | 28 | 0% | $1,026,411 | 4.79% |
| Small General Contractors - Sec. 7(a) (9) | 7 | 0% | $4,254,286 | 5.35% |
There are several advantages to using a Small Business Administration (SBA) Preferred Lender Program (PLP) lender versus a non-PLP lender when seeking an SBA-guaranteed loan. As a result of these advantages, SBALenders.com only refers borrowers to existing, top 50 SBA preferred lenders. PLP lender advantages include:
- Faster turnaround time: PLP lenders are able to make final credit decisions and close SBA-guaranteed loans without prior SBA review, which can result in a faster turnaround time for loan applications.
- Greater flexibility: PLP lenders have more flexibility in terms of the types of loans they can offer and the terms and conditions of those loans. This can give them the ability to better tailor loan products to the specific needs of small businesses.
- Enhanced customer service: PLP lenders are often able to offer enhanced customer service to small businesses, as they have a high level of expertise in SBA lending and are able to provide more personalized attention to their customers.
- Greater access to capital: Because PLP lenders are able to offer a wider range of SBA-guaranteed loan products and have more flexibility in terms of loan structure, small businesses may have greater access to capital through a PLP lender than they would through a non-PLP lender.
- Lower interest rates: As noted by the above table, on average SBA preferred PLP lenders charge lower interest rates compared to non-PLP lenders.