[fundingsolution]

Could someone share the contact info of his rep at BMO for SBA 7(a) loans?

[fundingsolution]

Anyone?

[Olderguy]

Just asking why BMO? Why would they be any better than some of the other flexiable non bank lenders?

Just to be clear, SBA bank lenders want to be secured by owner occupied commercial property. Non bank lenders can use personal assets as weell as business assets to collateralize a SBA loan.

[Olderguy]

It looks like BMO is a bank and you want to use a non bank lender for SBA loans. I have listed some reasons below:

SBA banks vs. non bank SBA lenders

I'd like to highlight some differences in SBA loans and lenders. Most of you have experience with SBA banks. However you should start looking into non-bank lenders for your SBA loans. Non bank SBA lenders are more flexible in their underwriting.

Non-Bank Lenders

An SBA non-bank lender is a financial institution that does not accept customer deposits. Their sole reason for existing is to lend money to eligible small businesses in their community.

On the other hand, a bank is a financial institution that solicits monetary deposits from their customers and in turn loans these funds to other customers such as individuals and businesses seeking capital for a variety of reasons including starting or expanding a business.

Banks solicit deposits from their customers for two reasons: Number one to meet the Federal Reserve’s capital reserve requirements to ensure satisfactory liquidity levels and number two because deposited funds in a demand deposit account, or what is commonly referred to as a checking account, are the lowest cost of funds.

Government Regulation

Due to increased government regulatory oversight it is typically more difficult to qualify for a small business loan from a traditional bank than it is from an SBA non-bank lender.

Therefore, seeking capital from an SBA non-bank lender may be to your advantage due to the fact that non-bank lenders typically possess less stringent underwriting guidelines and do not require you to move your deposit relationship to them; which is time consuming and sometimes undesirable if you particularly like your depository institution.


A non bank SBA lender will allow you to collateralize business and personal assets. A SBA bank will need to collateralize commercial property.

Some examples I've seen and done. I got a guy in Hawaii $350,000 SBA 7A putting a third UCC on his primary residence for collateral as he leased his office and warehouse.

I saw a company get a $2M SBA loan collateralizing all of their $10M equipment in Brazil.

Typically a SBA bank might require 3 years management experience in buying a business where I've seen a non bank lender require only one year experience.

I have approvals require collateralize all of a clients vehicles. I was able to go back to the credit committee/underwriting and have them release the requirement for liens on the vehicles and maintain the same approval.

I have done a lot of these loans and many brokers have reached out to me with their frustration doing SBA loans. Yes you do need to do some financial analysis when reviewing the package. And it helps to have the merchant connect you with their accountant or bookkeeper for documentation needed.

[CRElender]

Could someone share the contact info of his rep at BMO for SBA 7(a) loans?

BMO just merged with Bank of the West and BOTW's SBA department has been rolled into BMO. BMO is a large Canadian bank that has a big presence in Chicago. I worked with them during the great recession.

It will be interesting to see how BMO's very conservative credit culture works with the BOTW crew. I do have some contacts at BOTW SBA if you want to send me a DM.

If you need help with any 7a financing that is secured by CRE, let me know. We are a bank and unlike the non-bank lenders, we don't have to sell our guarantees to generate revenue. That means our pricing is much more competitive. All SBA lenders must follow SBA standard operating procedures and while many lenders have different credit appetites, the direct bank lenders dominate the SBA lending arena.

[abfunders]

Bank of the West was probably the worst experience I ever had working a deal. Granted it was equipment lender, but it was horrific, I have shivers just thinking about them. I financed a purchase of an RV that had a, existing loan at BOTW. They work 100% of their communications through fax (in 2021!), and every time you called their customer support line (because they don't have email), you got a different operator and there was no way to be routed to someone who you knew, and that was after waiting on the phone for hours.

I hope BMO fixes that.