Did you realize that almost all business loan requests are potential SBA 7(a) loans. Unless the company is not for profit or the request is investment or speculative in nature the loan usually can be made under the 7(a) program.
The best place to look for 7(a) opportunities is right in your own loan portfolio. Most conventional bank loans are made with short maturities, 3 or 5 year balloons so they will usually qualify for refinance. Refinancing under 7(a) benefits the borrower by giving them longer terms and cash out for improvements or working capital. The bank benefits by lowering its risk, mitigating collateral deficiencies, and earning substantial fee income by selling the guaranteed portion.
Another great place to look is failed banks that have been taken over by outside banks under loss share agreements. These agreements with the FDIC usually expire within 3 to 5 years so often times those banks will put pressure on borrowers to move their loan before that time is up. Most of these are good borrowers but due to market conditions may be underwater with their collateral. These make excellent candidates for 7(a) refinancing since the SBA will approve loans even when they are not fully collateralized. With the SBA guarantee, the refinancing bank mitigates the less than fully secured position creating a win win scenario.
The point to remember is, don’t wait for these loans to find you, they are right there in front of you waiting for you to find them!