A status SBA gives some 7(a) lenders to decide eligibility and credit on their own authority, with SBA reviewing a loan only at purchase or oversight.
Under the Preferred Lenders Program, designated lenders process, close, service and liquidate SBA guaranteed loans with reduced documentation to SBA and less prior approval from it. The regulation makes the lender responsible for every eligibility decision, including size, and every credit decision, and for confirming that the closing is correct.
The lender sends SBA its documentation signed by two authorized representatives. SBA issues the loan number if it finds no eligibility problem and funds are available. SBA does not review the lender’s credit analysis or the structure first. It reviews them when the lender asks SBA to buy the guaranty, or during an oversight review, and it can repair or deny the guaranty if the lender got something wrong.
A PLP lender may not use the program to reduce its own existing credit exposure to a borrower, with a narrow exception for a recent interim loan. SBA’s published policy also names some businesses and loans that are not eligible for PLP. Authority is granted for a term of two years or less.
How it shows up in the data here
In the SBA file, ProcessingMethod PLP, PLW and PWC mark loans made under the program. A lender page shows Preferred Lender authority as a loan count and a share of its 7(a) loans, and the lender search can filter for lenders above 25, 50 or 75 percent. The file does not show whether a lender holds the authority today.
Go further
- Lenders with at least half their 7(a) loans under PLP: Lenders with 10 or more 7(a) loans in the window.
- SBA 7(a) lenders by loans made
- SBA Preferred Lenders Program and Express: how they differ: Some SBA lenders decide a loan on their own authority and some send it to SBA first. The difference changes who reads your file and who carries the risk.
- How to read SBA 7(a) and 504 loan data: The SBA publishes the 7(a) and 504 loans it guarantees, lender by lender, every quarter. It is the best public record of who lends to small businesses, and it is easy to misread.
Related terms
- Delegated authority (SBA lending): Authority SBA grants a lender to make its own eligibility and credit decision before SBA issues a loan number: PLP and SBA Express for 7(a), ALP and PCLP for 504.
- SBA Express loan: A 7(a) loan of $500,000 or less that only a lender with SBA Express authority can make, on its own credit decision, with a 50 percent SBA guaranty.
- SBA 7(a) loan: SBA's main business loan program. A lender makes the loan and SBA guarantees part of it: up to 85 percent of $150,000 or less and 75 percent of more, on loans up to $5,000,000.
- SBA guaranty percentage: The share of a 7(a) loan that SBA guarantees to the lender: up to 85 percent of a loan of $150,000 or less, up to 75 percent of a larger loan, and 50 percent on SBA Express.
Sources
Plain definitions for orientation, not legal, tax or credit advice. A lender's own policy decides what it will do.