The short answer
On a 7(a) loan, a lender with Preferred Lenders Program (PLP) or SBA Express authority makes the credit decision itself, and SBA does not review the credit before it issues a loan number. Under general processing SBA decides. Express is limited to $500,000 and a 50 percent guaranty. For 504, Accredited and Premier Certified development companies hold the equivalent authority. The SBA file shows which door each loan used.
The three doors for a 7(a) loan
Every 7(a) request goes through one of three doors. Which one depends on the lender’s authority and the loan.
How a 7(a) loan can be processed
| Door | Who decides eligibility and credit | What SBA does before the loan number | Code in SBA’s file |
|---|---|---|---|
| General processing | SBA | Reviews the whole file, including use of proceeds, collateral, structure and equity | 7AG and related |
| Preferred Lenders Program (PLP) | The lender | Checks for an eligibility problem and for funds; does not review the credit analysis or structure | PLP, PLW, PWC |
| SBA Express | The lender | Same as PLP; loans are $500,000 or less | SBX, EXP |
Under general processing, the lender sends the request and its attachments to SBA, and SBA makes the final call on eligibility, creditworthiness, the use of proceeds, the adequacy of collateral, the structure and any equity required. Under PLP, 13 CFR 120.452 makes the lender responsible for every eligibility and credit decision and for getting the closing right. The lender sends SBA its documentation signed by two authorized representatives, and SBA issues the loan number if it sees no eligibility problem and funds are available.
SBA Express is a delegated door with its own limits. A loan is $500,000 or less, the guaranty is 50 percent, and only a lender with Express authority can make it. An Express lender may use its own forms, notes and collateral documents, and for the credit decision, including how to treat a past bankruptcy or whether to require an equity injection, SBA leaves the call to the lender’s judgment. A line of credit is allowed, with a term of up to 10 years including its term-out. An Express loan may also carry a default interest rate and non-financial default provisions, if they are substantive, agreed in writing at closing and consistent with the lender’s other commercial loans. A 7(a) Small or Standard loan may not carry a default rate.
What changes for you
Who reads the file. Under general processing there are two readers, the lender and SBA. Under PLP and Express there is one, and SBA looks later. SBA reviews the lender’s analysis when the lender asks SBA to buy its guaranty or during an oversight review. If the lender got something wrong, SBA can repair or deny the guaranty. That is one reason a delegated lender can be strict on a point that looks minor: the equity proof, the tax transcripts and the franchise listing are examples, and the lender, not SBA, bears the risk of a wrong call.
What the lender keeps. The guaranty percentage is part of the deal, and Express is lower.
Worked example (hypothetical). A $400,000 loan. Under PLP the guaranty is 75 percent: SBA’s share is $300,000 and the lender keeps $100,000 unguaranteed. As an Express loan the guaranty is 50 percent: SBA’s share is $200,000 and the lender keeps $200,000. The lender holds twice as much of the loan with no guaranty behind it. SBA’s rules do not say how a lender will respond. Ask.
What cannot go through a delegated door. SBA’s published policy names some businesses and loans that are not eligible for PLP, and a lender cannot use PLP to reduce its own existing credit exposure to the borrower, with a narrow exception for a recent interim loan. A delegated lender that needs an exception to SBA’s policy must ask SBA first, and the answer covers that loan only.
What SBA still checks after the loan number
A delegated decision is final for the lender, not for the guaranty. SBA reads the file when the lender asks it to buy the guaranty, and the SOP names where a miss costs the lender.
- Equity. The lender must verify the required cash before it disburses. If it does not, that may warrant a repair or a partial or full denial of the guaranty.
- Tax transcripts. If the lender cannot obtain and reconcile them, the guaranty may be repaired or denied. An Express lender may close first, so the risk comes later.
- Franchise. Proof that the brand is on the Directory goes with any purchase request, and the delegated lender bears the risk of a wrong call on an unlisted brand.
- Environmental review. Failure to follow SBA’s steps may result in denial of the guaranty.
- Eligible passive company. If one condition is missed, SBA may deny liability.
Some things need SBA first, even for a delegated lender. If an owner, or a member of an owner’s household, is a federal employee at grade GS-13 or above, the borrower needs a statement of no objection and the lender needs SBA’s written clearance before it processes the loan on its own authority. For you, a delegated lender’s insistence on these items is about protecting its own guaranty.
How a lender gets and keeps the authority
Under 13 CFR 120.440, SBA decides whether a lender has the continuing ability to evaluate, process, close, disburse, service and liquidate SBA loans, with satisfactory SBA performance, compliance with program requirements such as monthly reporting and timely payment of its fees to SBA, and no open corrective actions. SBA also looks at enforcement actions and other risk signs, such as rapid growth or low SBA volume. The decision is final. The lender signs a Supplemental Guarantee Agreement with a term of no more than two years, and a lender with under three years of SBA lending gets one year or less.
Every SBA lender must also meet 13 CFR 120.410: capital to support its SBA lending, satisfactory SBA performance, supervision by a federal financial regulator, a state regulator SBA finds satisfactory, or SBA itself, and standing with SBA.
So the authority is granted and can lapse. The SBA file tells you what a lender did. It does not tell you what the lender holds today.
Looking for a lender now? Find lenders for this in your state or see SBA 7(a) lenders state by state.
The 504 equivalents
In a 504 project the delegated party is the development company, not the bank. SBA processes every 504 loan at one center, and the door depends on the development company’s authority.
How a 504 loan can be processed
| Door | Who decides credit | Limits |
|---|---|---|
| Standard or abridged | SBA | The abridged method is a shorter submission, not delegated, and cannot be used for a change of ownership or a deal between close family members |
| Accredited Lenders Program (ALP) | SBA, with expedited processing | The development company has increased authority to process, close and service |
| ALP Express | The development company | $500,000 or less; SBA reviews eligibility only; no exceptions to policy, and no loan SBA already declined or the CDC withdrew |
| Premier Certified Lenders Program (PCLP) | The development company | Delegated authority to process, close, service and liquidate loans, with a loss reserve fund |
An ALP development company must show, among other things, at least 20 SBA-authorized 504 loans in the last three years and a portfolio of at least 30 active loans, loan officers with set experience and a Designated Attorney. A PCLP development company must be an ALP company in substantial compliance and aims to process at least half its 504 loans under PCLP. PCLP companies may not use delegated authority to refinance their own debt or to make certain special-purpose loans. They may take a request that another development company in the same area declined, if SBA has not declined it.
The bank’s own diligence is separate. The delegated authority belongs to the development company, and nothing in the SBA file says what the bank requires.
How to tell which door a lender uses
The SBA loan file carries a ProcessingMethod field on each loan. The site groups it so that every lender is counted the same way.
| Processing method | Loans | Share |
|---|---|---|
| Preferred Lenders Program (the lender makes the credit decision; SBA does not review it first) | 102,782 | 59% |
| SBA Express and Export Express (the lender's delegated authority) | 62,591 | 36% |
| General processing (SBA reviews the request) | 8,567 | 5% |
| Other (CAPLines, international trade, other programs) | 1,082 | 0.6% |
SBA FOIA, Net of cancelled approvals. Method is the SBA field ProcessingMethod, grouped here.
For Oct 2023 through Sep 2026, of 7(a) loans made, 59% SBA FOIA, went through PLP, 36% through SBA Express and Export Express, and 5% through general processing. Of the funded 504 loans, 76% SBA FOIA, went through a development company with Accredited Lenders authority and 1.4% through one with Premier Certified authority. The rest used other 504 methods, such as standard processing.
A lender page shows its own mix in a section headed “Loan channel and SBA processing”, when the record has it: loans under Preferred Lender authority with their share, SBA Express loans, CAPLine loans and the median days from approval to first disbursement. A count under five is not shown. In Loan Comps, a lender’s recorded loans carry the SBA program, and for a 504 loan the development company.
To read a lender’s mix, divide its PLP count by its total. A hypothetical lender with 40 loans, 30 of them PLP, has a PLP share of 30 divided by 40, or 75 percent. A lender with 40 loans and 2 PLP has 5 percent. Compare each with the national share in the table. Neither number says whether the lender will take your request, only how it has processed the loans it made.
What to ask the lender
- Do you decide loans of my size on your own authority, or do they go to SBA?
- If my request needs an exception to policy, who asks SBA, and what happens to the timeline?
- Which documents does SBA see on a loan like mine, and which stay in your file?
What the record cannot tell you
The door is a fact about loans already made. It does not show current authority, current appetite or whether a lender will decide yes. A lender with PLP authority can decline, and one that sends a loan to SBA can still make it.
Terms used here
- Preferred Lenders Program (PLP): 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.
- 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) Small loan: A 7(a) term loan of $350,000 or less. The lender may use its own forms and credit memo for much of the file, and the debt service coverage floor is 1.10 to 1.
- 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.
- Certified development company (CDC): A lender certified by SBA to package, close and service 504 loans and to issue the debenture that funds up to 40 percent of a project.
- Third-party lender (SBA 504): The bank or other lender that makes the first-lien loan, usually about half the project cost, in an SBA 504 project. SBA does not guarantee its loan.
- SOP 50 10 (SBA lender manual): SBA's rulebook for 7(a) and 504 loans, in three parts: core requirements, 7(a) requirements and 504 requirements. Version 8.1 took effect on October 1, 2026.
Sources
Every rule and outside figure above comes from one of these, opened on . Dates are the source's own. Figures from this site's data carry their own source and date beside them.
- SBA SOP 50 10 8.1, Lender and Development Company Loan Programs (Introduction; Section A, Chapters 1 and 5; Section B, Chapters 1, 2 and 6; Section C, Chapter 1; Appendices 14, 16, 17, 18 and 19), effective .
- 13 CFR 120.410, requirements for all participating lenders, retrieved .
- 13 CFR 120.440, how a 7(a) lender obtains delegated authority, retrieved .
- 13 CFR 120.450 and 120.452, the Preferred Lenders Program and PLP loan processing, retrieved .
- 13 CFR 120.840 to 120.848, Accredited Lenders Program, ALP Express and Premier Certified Lenders Program, retrieved .
- SBA 7(a) and 504 FOIA data dictionary, ProcessingMethod field, retrieved .
- SBA 7(a) and 504 FOIA loan data, dataset page (data as of September 30, 2026), page last modified .
Next step: check the record
- SBA 7(a) lenders by loans madeThe 36-month count for every lender, with the method printed above the table.
- Loan Comps for the 7(a) example in this guideRestaurants in Ohio at $400,000 is the example below. Open a lender's recorded loans and read the SBA program on each.
- SBA 504 development companies by projectsThe certified development companies behind 504 projects, to see who works in your area.
Keep reading
- SBA 7(a) or 504: which fits your loan: Both are SBA loans, and they work differently. The choice usually turns on what you are buying and how much cash you can put in.
- SBA 7(a) loan package checklist: A 7(a) package is the bank's usual file plus SBA's own list. Know which items SBA requires and you can have them ready before the first call.
- SBA 504 loan package checklist: A 504 project has three parties, two loans and a closing date set by a monthly bond sale. Build the package for all three.
- 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.
- What to do after a bank says no to a business loan: One bank's no is one lender's answer, and the reasons are yours to ask for. They usually point to a constraint you can name.
Questions people ask
Can an SBA Express lender send my loan to SBA to decide?
No. SOP 50 10 8.1 says an SBA Express lender may not ask SBA's loan guaranty processing center to process an Express loan under non-delegated authority. An Express loan is decided only on the lender's own authority.
How do I know if a lender has delegated authority today?
Not from the public SBA loan file, which shows how each loan already made was processed. Delegated authority is granted for a term of up to two years, so ask the lender which authority it holds now and for which loan sizes.
Cite this
Source: The Lender Report, SBA Preferred Lenders Program and Express: how they differ, https://lender.report/guides/how-sba-preferred-lenders-differ/, data as of November 9, 2026.
General information, not legal, tax or credit advice. A lender's own policy decides what it will do; ask it for the policy in writing.
SBA does not require you to use an agent or broker for a loan application. SBA has not reviewed or endorsed this site.
Source and date appear beside each figure. Banks report balances, not loans made. Loans made come only from HMDA and SBA files. We do not audit filings and can make errors joining them. Report a problem