Misconceptions about SBA Lending

Misconceptions about SBA Lending

I guess we shouldn’t continue to be astonished by supposed experts who peddle not only wrong, but deal killing advice about small business lending.

Take this Forbes article.

The author offers three takeaways for small business borrowers – and they are all wrong.

1) Enlist the help of an expert

This is false, bad, costly information. You don’t need representation to get a loan. You don’t need a packager. You don’t
need a broker. While it may help in some instances, it is certainly not advice that should be at the top of the list.

2) Meet in person

The implication is the small business owner’s force of personality can be the difference in a deal. No. The second step, really the first step is to do your homework and get your financial house in order.

3) Shop around.

Our expert boasts he got a better deal by shopping his deal to 10 banks and brags, “I still regret I didn’t go to 15 banks.”

A small business loan should not be characterized as a commodity such as gas or food. And bluntly, few lenders who would allow themselves to drawn into this type of costly exercise.

Finally, the author quotes another expert that says banks are just focused on collateral. And small businesses that don’t must have a “clear vision for innovation and economic growth.”

No mention of cash flow.

Check out the article here, but it probably is best just to move on.

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Bob Coleman
Editor
Coleman Report