An SBA Financing Alternative: NonBank Lenders

In the world of Residential finance it is very common to obtain financing through a NonBank Lender. However, where commercial lending is concerned a NonBank Lender option is not quite as commonplace. Recently I came across an article on the US Small Business Administration’s Website that did a pretty good job of explaining what we do at NonBank Lender.

In a nutshell: NonBank Lender is a financial institution that extends credit or loans. As with most lenders of this type, NonBank Lender provides financial services to businesses and not individuals and we do not hold depository accounts.

As you would imagine working with NonBank Lender is a terrific way to augment what you will find offered through traditional banking channels. The key to finding success through a NonBank Lender as it is with any Lender for that matter is gaining a clear understanding of the terms and conditions associated with the financing solution being presented. In most cases, and most certainly with NonBank Lender clients you can expect to receive a Letter or Expression of Interest, which outlines the following:

  • The Interest Rate
  • The Fees Being Charged
  • Any conditions that still need to be met for a lending commitment to be issued

This is a very important step in the process. If your lender will not provide one then you should simply move on because you have no idea what you will be getting.

Advantages of working with NonBank Lender:

  • Specialization allows NonBank Lender greater insight and comfort when lending to certain industries, under specific programs like the SBA, and therefore, can get more comfortable with companies that are at an earlier stage in their growth cycle.
  • NonBank Lender will approve transactions that are often outside what a traditional bank would consider credit worthy.
  • NonBank Lender can fashion terms that meet the needs of specific investors where traditional lenders often must restrict structures to a limited sheet of current product offerings.
  • Underwriting data points also less rigid at NonBank Lender. Instead of applying a one size fits all approach NonBank Lender can rely instead on a more common sense review of your credit factors.

Other Considerations:

  • At NonBank Lender rates and fees are likely slightly higher than Big Bank options. However, ask your NonBank Lender associate for ways that those costs can be mitigated through more flexible terms.
  • NonBank Lender is not regulated in the same way as a Big Bank and therefore it is important to understand the disbursement schedules and timelines. Do not simply assume all parties are on the same page.
  • At NonBank Lender we understand that to you we may not be a household name yet. For this reason, we make available references, financial statements, and additional disclosure information to help you understand thoroughly who you are dealing with.

The experience you ultimately have when selecting a financing partner is very dependent upon the effort you put into locating the best match. As you can see from the comments above, price is simply one consideration in making that determination. After a slow decline can often be much more costly than paying slightly more to get the approval you need and move on with growing your business.

Fill out the form below for a frank assessment of your project, our sales staff are standing by to discuss your project and further to develop a plan just for your. See for yourself how the number of small business owners that have already experienced for themselves the value of NonBank Lender is growing monthly. Since 2009, we have funded more than $138 million for credit worthy borrowers just like you.