SBA loans can boost your business, helping you to expand, pay debts, or keep payroll current. However, the work’s not done when you fill out the application. By maintaining a strong, trusted relationship with your SBA lender, you can stay on top of loan issues, get access to better terms, and even get fast-tracked for future financing opportunities.

Here’s what it takes to be known as the ideal SBA borrower, including communication tips and ways to be proactive about your loan repayment.

Why your SBA lender relationship matters.

Just as you would want a good relationship with a landlord to keep our living situation secure and worry-free, you’ll want to prioritize the connection you have with your SBA lender to give your business as much stability as possible.

Why? Lenders don’t just pay out loan money. They can advise you on the right amount of risk to take, help you navigate the loan process, and even advocate for that “yes” when you need it most.

If you earn your lender’s trust, they can be more open to your preferred loan terms (monthly payment amounts or term length) and can even consider you for more loans down the road. It’s actually much easier for banks to work with existing customers, since they have much of what they need for approvals on file. It benefits them to keep working with the business owners they know.

As you build credibility, you may gain access to more and better startup loans over time, a win-win for both borrower and lender.

Practical steps to strengthen your SBA lender relationship.

Keeping your lender in your good graces works much like maintaining any type of relationship, with a few special considerations. They include:

1. Communicate clearly and often.

Don’t make the bank come to you for clarification, especially when it comes to late or missing payments. Even if you have no news to report, making a quick call or email to update them on business goal progress, challenges, or wins can go a long way. Avoid hiding bad news, such as a sudden revenue loss or legal situation.

2. Keep documentation organized.

The SBA loan application won’t be a one-and-done and is actually the start of some dedicated bookkeeping and reporting. Continue tracking financials, collecting tax returns, and updating business plans, and create a second, lender-specific copy of important documents that you don’t have to have back. As the lender asks for information, you’ll have it handy and ready to go. If they don’t, it will be ready to provide for your next loan application.

3. Show consistency in business performance.

The lender will want to see that they took a good financial risk when lending you money, and you can play a key role in demonstrating your creditworthiness. In addition to the necessary documents shared above, keep separate reports, executive summaries, and pitch decks that highlight your milestones. Include new business contracts, customer testimonials, or market expansion plans. This isn’t a time to be modest about your accomplishments!

4. Be transparent about risks.

Even if you didn’t have these concerns when you first applied for the SBA loan, it’s up to you to make the lender aware of any risks that could jeopardize the loan. Lenders prefer honesty over surprises and would rather you share even a suspected hazard that hasn’t occurred yet. Explain how you’re dealing with any challenges, no matter how seasonal or temporary. This includes industry shifts, buyer sentiment, and product defects.

5. Use your lender as a resource.

Lenders make their money by betting on the right businesses. So, they’ve seen their fair share of successful scenarios. Instead of treating the loan like a one-time business transaction, ask for advice on structuring debt, preparing for expansion, or improving overall credit. By making them a long-term partner with a vested interest in your success, you ensure you both get all you can from the relationship.

Mistakes to avoid with SBA lenders.

Lenders can be understanding if you don’t follow these best practices perfectly. However, it’s best to start on the right foot and set the tone for a professional and reliable partnership. If possible, avoid these errors that can make it difficult for your lender to trust you and may harm your relationship over time.

  • Keeping information about your business challenges to yourself
  • Submitting incomplete paperwork or documents with errors
  • Not staying in touch after the loan payout
  • Applying for much more money than you can reasonably afford, even if you qualify for that amount

Any one of these mistakes can keep you from enjoying a fruitful partnership with your lender. It can keep you from getting faster approvals for future SBA loans and access to other lines of credit or promotional offers.

Lendio can help.

Do the SBA loan requirements seem like too much? It’s true that failing to nurture the lender relationship can limit your future borrowing options and may cause you to miss out on some trusted business advice.

The good news is that you don’t have to shoulder the burden of this alone. Lendio not only helps you find the best SBA-approved lender that’s right for your initial borrowing needs, but it also helps you foster long-term relationships to keep your business going strong – even in difficult times.

The platform offers one application for multiple lender options and simplifies the documentation and submission process. With less time spent on paperwork, you can keep on top of lender communication while you tend to the health of your business.

With strong relationships comes stronger business, and Lendio’s here to help at every stage of your journey. Start your application for an SBA loan with Lendio today!