The Right Lender Isn't The One You Think

A Tale of Two Approaches

A searcher came to us after a frustrating experience. He kept seeing LinkedIn and Searchfunder posts from and about a few top SBA lenders. 

He spent weeks applying to these well-known lenders, only to face rejection or endless delays. "I was surprised," he told us. "The business was strong, growing, and profitable. I had a good personal financial statement, and the cash flow coverage was strong. I couldn't understand why these top SBA lenders weren't interested."

When he came to us, we took a different approach. Instead of chasing the big names, we submitted the deal to 13 qualified lenders - including several newer entrants to the SBA space. 

Within four days he had three term sheets, with the best offer coming from a regional bank that recently launched an aggressive SBA lending program.

"The lender that ultimately funded us wasn't even on my radar," he admitted. "But they moved incredibly fast, and offered great terms (Prime + 1.5%) because they were eager to build their portfolio."

The “Perfect Fit” Fallacy

Most borrowers instinctively focus on finding that one "perfect" lender. It feels logical - maybe they already know your business, came highly recommended, or have a strong track record in your industry. But this common approach sabotages your chances of success. Why? 

Because what you see on the surface is only a tiny part of what drives lending decisions.

The Hidden World of Lender Decision-Making

Even the strongest deals get rejected for reasons you'll never see or know about:

• The lender just hit their exposure limit in your industry

• They recently had a similar loan go bad

• Their credit policy quietly changed last month

• The expert underwriter who loves your industry just left

• They've maxed out lending in your region

• They already hit their quarterly targets and are slowing down

Here's the kicker: None of these factors has anything to do with your business's strength or the quality of your application.

Numbers Don’t Lie

Think about it this way: If you submit to only 1-2 lenders, you're betting everything on hoping none of these hidden factors are at play.

But when you submit to 10+ qualified lenders, you dramatically increase your odds of finding the right lender looking to fund businesses like yours right now.

Even better? When multiple lenders compete for your business, you're much more likely to get favorable terms. We regularly see businesses get better offers from their 3rd or 4th option compared to their "perfect" 1st choice.

Having multiple offers provides leverage to get that half a point reduction in interest rate or reduced sponsor equity requirement.

The Smart Approach: Cast a Wide (But Targeted) Net

Running a proper financing process means:

1. Identifying 10-20 lenders who regularly fund businesses like yours

2. Submitting to them simultaneously (timing matters!)

3. Managing the process professionally to create competitive tension

4. Comparing multiple term sheets to find the best deal

Sound overwhelming? That's exactly why we built our CapFlow platform. We match your business with 10+ best-fit lenders and manage the entire process until closing, generating multiple term sheets within days on SBA deals.

The Bottom Line

Don't let the quest for the "perfect" lender limit your options. The right lender is often one you haven't even heard of yet, and finding them among the hundreds of lenders out there is a numbers game.

Make sure to run a robust process to generate multiple financing options and the highest chance of success.

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To your financing success!