SBA Lending Environment

searcher profile

March 27, 2023

by a searcher from University at Buffalo, State University of New York - School of Management in Buffalo, NY, USA

How has the lending landscape changed in the SBA space as a results of the current stress on the Banking Environment. I assume the lending is getting tighter, but has anyone actually seen any specific changes?
SBA (7a) - required equity? Interest rates? Any other adjustments / ratios?

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commentor profile
Reply by a lender
from California State University, Sacramento in Seattle, WA, USA
Live Oak Bank has not changed our policy. We are looking for adequate historic DSC and it's been the same policy for many years now. The issue is that enterprise value expectations of sellers haven't changed to reflect the increase in capital costs. If the buyer is getting an SBA loan, they'll be able to afford less price all things being equal due to rising interest rates compared to same time last year. This makes it 'feel' like banks are tightening their policies when in fact most probably haven't.

^redacted‌ and ^redacted‌ do a weekly office hours where we walk you through a sample deal and talk about all things currently SBA. DM and I'll send you links.
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Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
We are a commercial loan brokerage shop and work with over 60 SBA lending partners. Fortunately we have not seen any major tightening in the last several weeks. Most of the institutions are healthy. I would say there has been some slight tightening since the start of the year due to concerns about the economy, but overall lenders are still doing deals that make sense. They may be a bit less likely to reach right now for a deal, but we have still been able to get done pretty much everything we have taken to market so long as it qualifies.
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