The “sba” is the most absolute garbage organization I’ve ever taken part of. Complete scam. It’s literally only for minorities doing new startups whos businesses will fail 99% of the time. I applied multiple times and always get the same answers. Even went in person. Hoop after hoop only to be denied every time. I know people who got the loans. Big loans too. New restaurants etc. lasted a yr. Closed. Nobody gives a shit. They dont support the backbone businesses wanting to expand just the garbage.
I promise you, these are not all minority borrowers starting a restaurant.
It is important to note that the SBA does not LEND, they guarantee loans. (they provide a 75%-85% guarantee to the lender in case of default, depending on the loan amount / program)
Much like the FHA does not lend money to homebuyers, they guarantee a large portion of the loan amount to the lenders in case the buyer defaults.
When applying for an SBA loan it is a good idea to work with a SBA preferred lender. These companies are able to fund SBA loans completely in house without having to get SBA approval FIRST. They can close in as little as 30-45 days.
It is also VERY IMPORTANT to note that each lender has their own guidelines and criteria on top of the SBA guidelines.
Regarding your comment about expansion loans, there are companies that ONLY do SBA loans for expansion, such as Newity / Northeast Bank. There are companies that will not touch restaurant startups, to your point - high failure rate. I'm purchasing an existing successful business in the quick-serve restaurant industry. Some lenders won't touch, even with good numbers.
One lender might send you packing, another might say "no problem!"
For example, US Bank told me because I don't have two years of direct experience in the industry they won't even consider it, whereas other lenders said they can work with that.
Another part of my scenario, haven't really had income in the last couple of years, took time off from my career to explore other options. A couple of lenders said they can't work with that. Other lenders said, "No problem! You're purchasing a business with cashflow to support paying you going forward, we can work with this." The fact that they can do it both baffles me and makes sense at the same time!
Another point - some wanted a 10% cash injection from me. Others 5%. So far, I have one that is only asking for 2.5%.
Point is, use only SBA preferred lenders, talk to MANY as they all have different underwriting criteria.
Apply with many, if you need to.
Some are VERY strict and difficult, others are way, way more relaxed.
I'm loving my bank contact right now, where I've chosen to send my loan.
I can put you in touch with him if you like.
He's working with me to structure my deal in a way that he knows will get approved. His underwriters will also work with us to try to make it happen, even if they won't approve it on first inspection. "If we do this, and this, and structure it this way, we can approve it".
I don't have the loan yet, but he's very experienced and is certain I will get approved.
The “sba” is the most absolute garbage organization I’ve ever taken part of. Complete scam. It’s literally only for minorities doing new startups whos businesses will fail 99% of the time. I applied multiple times and always get the same answers. Even went in person. Hoop after hoop only to be denied every time. I know people who got the loans. Big loans too. New restaurants etc. lasted a yr. Closed. Nobody gives a shit. They dont support the backbone businesses wanting to expand just the garbage.
Sorry to hear that you've had that experience. I'm currently in the process myself (business acquisition) and things are looking great so far.
Check this out. You can see there were over 70,000 SBA loans funded in 2024 nationwide, and already just under 36,000 funded year-to-date 2025. https://careports.sba.gov/views/7a504LenderReport/LenderReport?%3Aembed=y&%3AisGuestRedirectFromVizportal=y
I promise you, these are not all minority borrowers starting a restaurant.
It is important to note that the SBA does not LEND, they guarantee loans. (they provide a 75%-85% guarantee to the lender in case of default, depending on the loan amount / program) Much like the FHA does not lend money to homebuyers, they guarantee a large portion of the loan amount to the lenders in case the buyer defaults. When applying for an SBA loan it is a good idea to work with a SBA preferred lender. These companies are able to fund SBA loans completely in house without having to get SBA approval FIRST. They can close in as little as 30-45 days. It is also VERY IMPORTANT to note that each lender has their own guidelines and criteria on top of the SBA guidelines.
Regarding your comment about expansion loans, there are companies that ONLY do SBA loans for expansion, such as Newity / Northeast Bank. There are companies that will not touch restaurant startups, to your point - high failure rate. I'm purchasing an existing successful business in the quick-serve restaurant industry. Some lenders won't touch, even with good numbers.
One lender might send you packing, another might say "no problem!" For example, US Bank told me because I don't have two years of direct experience in the industry they won't even consider it, whereas other lenders said they can work with that.
Another part of my scenario, haven't really had income in the last couple of years, took time off from my career to explore other options. A couple of lenders said they can't work with that. Other lenders said, "No problem! You're purchasing a business with cashflow to support paying you going forward, we can work with this." The fact that they can do it both baffles me and makes sense at the same time!
Another point - some wanted a 10% cash injection from me. Others 5%. So far, I have one that is only asking for 2.5%.
Point is, use only SBA preferred lenders, talk to MANY as they all have different underwriting criteria. Apply with many, if you need to. Some are VERY strict and difficult, others are way, way more relaxed. I'm loving my bank contact right now, where I've chosen to send my loan. I can put you in touch with him if you like. He's working with me to structure my deal in a way that he knows will get approved. His underwriters will also work with us to try to make it happen, even if they won't approve it on first inspection. "If we do this, and this, and structure it this way, we can approve it". I don't have the loan yet, but he's very experienced and is certain I will get approved.
My banker told me about them when I started my business and told me how great they are. I called once and got bad vibes and quit.