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  1. #1

    Question Looking for SBA bank that pays well for referrals

    I'm a new ISO looking to make referral revenue on SBA 7a loans. Can anyone recommend a bank that pays ISOs better than 1% on SBA loan referrals? I have a 1% arrangement now... looking to make 2-3%.

    Regards,

    David McCarthy, CEO
    McCarthy Merchant Capital LLC
    cash today for tomorrow's receivables
    www.mccarthymerchantcapital.com
    Main: (717) MCCARTH
    Direct: (917) 974-9872

  2. #2
    Senior Member Reputation points: 66298 Olderguy's Avatar
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    A SBA bank will pay you 2% (up to $1M loan, and it goes down on amounts over that) on the front end and and 3/4 to 1% on the back end.

    You can also have a third party fee agreement on the side (which isn't technically legal).

    I would not recommend using a SBA bank and start using a non bank SBA lender.

    I use the largest non bank lender in the US (capitalized at $500M) and have a direct relationship with the managing director.

    (Are they just paying you a rebate? Are you charging a service fee in the submission package?)
    Last edited by Olderguy; 02-15-2022 at 08:53 AM.
    Steve Benjamin
    Professional Business Loans

    1012 Contessa
    Irvine, CA 92620
    steveprobiz@gmail.com
    https://probizloans.net/
    Broker, Underwriter, general business loan expert
    949.228.1050


    @ 24 hour funding working capital loans
    @ Term loans from 3 years to 10 years at 9.5% and up
    @ Equipment financing up to 7 years
    @ Property loans - Hard Money and traditional - Primary, Investment, commercial, land, fix and flip, construction.
    @ SBA loans - 7A and 504.
    @ Private money equity and debt for major investments
    @ Personal Loans up to gross income from personal tax return.

  3. #3
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    Quote Originally Posted by Olderguy View Post
    A SBA bank will pay you 2% (up to $1M loan, and it goes down on amounts over that) on the front end and and 3/4 to 1% on the back end.

    You can also have a third party fee agreement on the side (which isn't technically legal).

    I would not recommend using a SBA bank and start using a non bank SBA lender.

    I use the largest non bank lender in the US (capitalized at $500M) and have a direct relationship with the managing director.
    Why on earth would you suggest something that is not "technically legal"?
    Hedley Lamarr......That's Hedley

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    Why would you say it is "technically legal," when it is legal. It is not a gray area at all.
    There are SBA guidelines on how much you can charge for packaging and there is even an SBA form that you submit in the loan closing paperwork to document the expense.

  5. #5
    Senior Member Reputation points: 66298 Olderguy's Avatar
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    I think you are missing what I am trying to say...I know brokers who charge 3rd party fee agreements. They do it instead of the 2% fee you can get through the loan. I don't agree but they do it.

    And you can indeed charge 2% plus get the rebate which what I was trying to get across.
    Steve Benjamin
    Professional Business Loans

    1012 Contessa
    Irvine, CA 92620
    steveprobiz@gmail.com
    https://probizloans.net/
    Broker, Underwriter, general business loan expert
    949.228.1050


    @ 24 hour funding working capital loans
    @ Term loans from 3 years to 10 years at 9.5% and up
    @ Equipment financing up to 7 years
    @ Property loans - Hard Money and traditional - Primary, Investment, commercial, land, fix and flip, construction.
    @ SBA loans - 7A and 504.
    @ Private money equity and debt for major investments
    @ Personal Loans up to gross income from personal tax return.

  6. #6
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    Quote Originally Posted by Olderguy View Post
    I think you are missing what I am trying to say...I know brokers who charge 3rd party fee agreements. They do it instead of the 2% fee you can get through the loan. I don't agree but they do it.

    And you can indeed charge 2% plus get the rebate which what I was trying to get across.
    Legally, you can't do that. Will you get caught? Small chance. Is it "technically legal"? No.
    It is literally spelled out in the SBA guidelines

  7. #7
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    Quote Originally Posted by mondial99 View Post
    I'm a new ISO looking to make referral revenue on SBA 7a loans. Can anyone recommend a bank that pays ISOs better than 1% on SBA loan referrals? I have a 1% arrangement now... looking to make 2-3%.

    Regards,

    David McCarthy, CEO
    McCarthy Merchant Capital LLC
    cash today for tomorrow's receivables
    www.mccarthymerchantcapital.com
    Main: (717) MCCARTH
    Direct: (917) 974-9872
    I'm not aware of any SBA Bank that pays 3% - but, there may be an exception

    Do you own research - There are Banks that have niche markets that do not pay a referral fee but allow outside fees to be charged.

    100 most active SBA 7(a) lenders


    https://www.sba.gov/partners/lenders...sba-7a-lenders
    Dave Lambert, Business Development
    dave@fcbankcard.com
    Merchant Services Consultant
    High Risk Merchant Payment Solutions
    SBA 7(a) Loans & Short-Term Funding
    T/VM: 727-291-7890
    Office: 727-233-1111
    Skype: fc-financial

  8. #8
    Being a direct SBA lender, I can pay more than 1% if you come direct to me. We can negotiate a better referral amount depending on volume, pricing, etc.

    Come straight to the source!
    Dan Wallace
    SVP
    Enterprise Bank
    National, direct SBA lender
    Fast and creative financing solutions
    970-390-6650
    dwallace@enterprisebank.com

  9. #9
    Senior Member Reputation points: 66298 Olderguy's Avatar
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    Quote Originally Posted by Yankeeman07 View Post
    I'm not aware of any SBA Bank that pays 3% - but, there may be an exception

    Do you own research - There are Banks that have niche markets that do not pay a referral fee but allow outside fees to be charged.

    100 most active SBA 7(a) lenders


    https://www.sba.gov/partners/lenders...sba-7a-lenders
    All pay 2 3/4% to 3%. 2 on the front end 1% to 3/4% rebate.

  10. #10
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    Quote Originally Posted by Olderguy View Post
    All pay 2 3/4% to 3%. 2 on the front end 1% to 3/4% rebate.
    I understand you have special provisions but us mere mortals are bound by SBA Rules:

    Prohibited fees
    Processing fees, origination fees, application fees, points, brokerage fees, bonus points, and other fees that could be charged to an SBA loan applicant are prohibited. The only time a commitment fee may be charged is for a loan made under the Export Working Capital loan program.


    https://www.sba.gov/partners/lenders...ction-header-9
    Dave Lambert, Business Development
    dave@fcbankcard.com
    Merchant Services Consultant
    High Risk Merchant Payment Solutions
    SBA 7(a) Loans & Short-Term Funding
    T/VM: 727-291-7890
    Office: 727-233-1111
    Skype: fc-financial

  11. #11
    Senior Member Reputation points: 66298 Olderguy's Avatar
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    You are allowed a max of 2%. Lender pays 3/4 on back end.

    Fee Disclosure and Compensation Agreement
    For use with 7(a) and 504 Loan Programs
    OMB Control No. 3245-0201
    Expiration Date: 11/30/2024
    SBA Form 159 (08-21) Previous Editions Obsolete Page 1 of 4
    Purpose of this Form: The purpose of this Form is to identify Agents and the fees and/or compensation paid to Agents by or on behalf of a small business applicant (“Applicant”) for the purpose of obtaining or expediting an application for a loan guaranteed by the U.S. Small Business Administration (SBA). This is a statutory requirement under 15 U.S.C. 642.
    See 13 CFR Parts 103 and 120 and SBA’s Standard Operating Procedure 50 10 for the rules governing compensation of Agents or SBA Lenders in connection with an SBA loan.
    Who must complete this Form: Whenever an Agent is paid by, either, the Applicant or the SBA Lender to assist them in connection with the SBA loan application, this Form must be completed and signed by: the SBA Lender, the Applicant and the Agent. For each Agent, a separate Form 159 must be completed and signed, and the SBA Lender and Applicant, both,
    must, also, sign and date the Form.

    Compensation must be disclosed on this Form for the following services:
    1. Loan packaging services, as defined in SOP 50 10, performed by an SBA Lender or other third party (this includes services performed by an individual/entity that is a Lender Service Provider (LSP) (7(a) only) or has an SBA approved Professional Services Contract (504 only) with the SBA Lender who is acting as a loan packager or referral agent employed by the Applicant);
    2. Financial statement preparation specifically for the loan application; and/or
    3. Consulting, Broker, or Referral services paid by the Applicant, SBA Lender, or Third-Party Lender
    Last edited by Olderguy; 03-03-2022 at 11:23 AM.
    Steve Benjamin
    Professional Business Loans

    1012 Contessa
    Irvine, CA 92620
    steveprobiz@gmail.com
    https://probizloans.net/
    Broker, Underwriter, general business loan expert
    949.228.1050


    @ 24 hour funding working capital loans
    @ Term loans from 3 years to 10 years at 9.5% and up
    @ Equipment financing up to 7 years
    @ Property loans - Hard Money and traditional - Primary, Investment, commercial, land, fix and flip, construction.
    @ SBA loans - 7A and 504.
    @ Private money equity and debt for major investments
    @ Personal Loans up to gross income from personal tax return.

  12. #12
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    You two should get a room......
    Hedley Lamarr......That's Hedley

  13. #13
    Senior Member Reputation points: 66298 Olderguy's Avatar
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    Quote Originally Posted by Hedley Lamarr View Post
    You two should get a room......
    Agreed....
    Last edited by Olderguy; 03-03-2022 at 11:43 AM.
    Steve Benjamin
    Professional Business Loans

    1012 Contessa
    Irvine, CA 92620
    steveprobiz@gmail.com
    https://probizloans.net/
    Broker, Underwriter, general business loan expert
    949.228.1050


    @ 24 hour funding working capital loans
    @ Term loans from 3 years to 10 years at 9.5% and up
    @ Equipment financing up to 7 years
    @ Property loans - Hard Money and traditional - Primary, Investment, commercial, land, fix and flip, construction.
    @ SBA loans - 7A and 504.
    @ Private money equity and debt for major investments
    @ Personal Loans up to gross income from personal tax return.

  14. #14
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    Quote Originally Posted by Hedley Lamarr View Post
    You two should get a room......

    If anyone wanted your 1/2 cent opinion I would have called the popcorn vendor!
    Dave Lambert, Business Development
    dave@fcbankcard.com
    Merchant Services Consultant
    High Risk Merchant Payment Solutions
    SBA 7(a) Loans & Short-Term Funding
    T/VM: 727-291-7890
    Office: 727-233-1111
    Skype: fc-financial

  15. #15
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    You are allowed a max of 2%. Lender pays 3/4 on back end.

    Show me on SBA From 159 that allows 2% Fee -

    BTW - I never had any SBA Bank pay any so-called "Back-End" fee -
    My Agent-Broker commission is disclosed within the closing documents which is paid to me by the bank.

    I've spoken to many Banks that underwrite SBA Loans (many do not deal with brokers) but, never has a discussion
    evolve around back end commissions.

    I'm curious - how do you write 504 Loans?

    "504 loans are available through Certified Development Companies (CDCs), SBA's community-based partners who regulate nonprofits and promote economic development within their communities. CDCs are certified and regulated by the SBA."
    Dave Lambert, Business Development
    dave@fcbankcard.com
    Merchant Services Consultant
    High Risk Merchant Payment Solutions
    SBA 7(a) Loans & Short-Term Funding
    T/VM: 727-291-7890
    Office: 727-233-1111
    Skype: fc-financial

  16. #16
    Senior Member Reputation points: 66298 Olderguy's Avatar
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    Per ISO agreement:

    Schedule A

    75 basis points of the funded loan amount for reach referral under this agreement based upon the fact that BizExec supplies contact information for referred party and is the primary source of the referral.

    This is paid separately from the fees allowed under the SBA 7A and 504 guidelines.
    Steve Benjamin
    Professional Business Loans

    1012 Contessa
    Irvine, CA 92620
    steveprobiz@gmail.com
    https://probizloans.net/
    Broker, Underwriter, general business loan expert
    949.228.1050


    @ 24 hour funding working capital loans
    @ Term loans from 3 years to 10 years at 9.5% and up
    @ Equipment financing up to 7 years
    @ Property loans - Hard Money and traditional - Primary, Investment, commercial, land, fix and flip, construction.
    @ SBA loans - 7A and 504.
    @ Private money equity and debt for major investments
    @ Personal Loans up to gross income from personal tax return.

  17. #17
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    75 BP is not 2%

    SBA Fees are what lenders are allowed to charge and maintain:

    https://www.sba.gov/partners/lenders...ction-header-9

    Note 2: For example, the guaranty fee on a $100,000 loan with an 85% guaranty would be 2% of $85,000 or $1,700, of which the lender may retain $425.

    SBA Fees do not factor into your commission - any Bank that I've spoken with - when they pay a referral fee - is always based upon the funded amount which
    is part of the closing documents -

    ***Prohibited feesProcessing fees, origination fees, application fees, points, brokerage fees, bonus points, and other fees that could be charged to an SBA loan applicant are prohibited. The only time a commitment fee may be charged is for a loan made under the Export Working Capital loan program
    Dave Lambert, Business Development
    dave@fcbankcard.com
    Merchant Services Consultant
    High Risk Merchant Payment Solutions
    SBA 7(a) Loans & Short-Term Funding
    T/VM: 727-291-7890
    Office: 727-233-1111
    Skype: fc-financial

  18. #18
    Senior Member Reputation points: 66298 Olderguy's Avatar
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    slap face emoji....
    Steve Benjamin
    Professional Business Loans

    1012 Contessa
    Irvine, CA 92620
    steveprobiz@gmail.com
    https://probizloans.net/
    Broker, Underwriter, general business loan expert
    949.228.1050


    @ 24 hour funding working capital loans
    @ Term loans from 3 years to 10 years at 9.5% and up
    @ Equipment financing up to 7 years
    @ Property loans - Hard Money and traditional - Primary, Investment, commercial, land, fix and flip, construction.
    @ SBA loans - 7A and 504.
    @ Private money equity and debt for major investments
    @ Personal Loans up to gross income from personal tax return.

  19. #19
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    Quote Originally Posted by Yankeeman07 View Post
    If anyone wanted your 1/2 cent opinion I would have called the popcorn vendor!
    Mongo likes pop corn. Screw you, I work for Mel Brooks......
    Hedley Lamarr......That's Hedley

  20. #20
    Senior Member Reputation points: 66298 Olderguy's Avatar
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    Quote Originally Posted by Hedley Lamarr View Post
    Mongo likes pop corn. Screw you, I work for Mel Brooks......
    I like Mel Brooks...good choice.
    This seems more like Stan and Ollie...
    "This another nice mess you've gotten me into"

    https://www.youtube.com/watch?v=dCznHilLo3M
    Last edited by Olderguy; 03-04-2022 at 08:52 AM.
    Steve Benjamin
    Professional Business Loans

    1012 Contessa
    Irvine, CA 92620
    steveprobiz@gmail.com
    https://probizloans.net/
    Broker, Underwriter, general business loan expert
    949.228.1050


    @ 24 hour funding working capital loans
    @ Term loans from 3 years to 10 years at 9.5% and up
    @ Equipment financing up to 7 years
    @ Property loans - Hard Money and traditional - Primary, Investment, commercial, land, fix and flip, construction.
    @ SBA loans - 7A and 504.
    @ Private money equity and debt for major investments
    @ Personal Loans up to gross income from personal tax return.

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