The Secret Weapon of SBA Borrowers: Preferred Lender Program (PLP) Status
If you’ve started researching SBA loans, you’ve probably seen lenders touting their “Preferred Lender” status. But what does that actually mean — and more importantly, why should you care?
The difference between working with a Preferred Lender and a standard SBA lender can mean weeks shaved off your approval timeline, a smoother process, and a lender who truly knows what they’re doing. At GoSBA Loans, our network of 50+ lenders includes many of the top Preferred Lenders in the country — and understanding why that matters could save you significant time and headaches.
Let’s break down everything you need to know about the SBA Preferred Lender Program.
What Is the SBA Preferred Lender Program (PLP)?
Delegated Authority to Approve Loans Without SBA Review
The Preferred Lender Program is the SBA’s way of recognizing lenders who have demonstrated a strong track record of processing, closing, and servicing SBA loans. Here’s what makes it special:
- Preferred Lenders have delegated authority — they can approve SBA loans on the SBA’s behalf without sending the application to the SBA for review
- This is a significant privilege that the SBA grants only to its most experienced and reliable lending partners
- PLP lenders take on more responsibility in exchange for streamlined processing power
- Not every bank or credit union that offers SBA loans has PLP status — it must be earned
Think of it like TSA PreCheck for lending. Regular SBA lenders have to submit loan applications to the SBA’s Loan Processing Center for review and approval. Preferred Lenders skip that line entirely.
How Does a Lender Earn Preferred Status?
It’s Not Easy — And That’s the Point
The SBA doesn’t hand out PLP status to just anyone. To qualify, a lender must demonstrate:
- A proven track record of SBA lending volume and performance
- Low default rates on their SBA loan portfolio
- Thorough understanding of SBA Standard Operating Procedures (SOPs)
- Experienced staff dedicated to SBA lending
- Proper systems and controls for loan origination, closing, and servicing
- Ongoing compliance with SBA requirements and audits
The SBA regularly reviews PLP lenders’ performance and can revoke the designation if standards slip. This means that Preferred Lenders are actively incentivized to maintain high quality in their SBA lending operations.
Why Preferred Lender Status Matters to You as a Borrower
Faster Approvals
This is the biggest advantage and the one you’ll feel most directly:
- Standard SBA lenders must submit your application to the SBA for review after the lender’s own underwriting. This adds 5-10+ business days to the process
- Preferred Lenders make the credit decision themselves using delegated authority. Once they approve, it’s approved — no waiting for the SBA to weigh in
- Total timeline difference can be 2-4 weeks faster from application to funding
- In competitive acquisition scenarios, this speed advantage can be the difference between winning and losing the deal
Smoother, More Predictable Process
Beyond speed, working with a Preferred Lender generally means a better overall experience:
- Fewer surprises — PLP lenders know exactly what the SBA requires because they’ve been doing this at high volume
- Better communication — experienced SBA teams mean you’re working with people who can answer your questions confidently
- Fewer document requests — they know what’s needed upfront and ask for it all at once, rather than drip-feeding requests over weeks
- More consistent underwriting — you’re less likely to get an approval that later falls apart during SBA review (because there is no separate SBA review)
Greater Expertise and Flexibility
PLP lenders tend to be more knowledgeable and creative with deal structuring:
- They understand SBA nuances that less experienced lenders miss
- They can identify solutions for complex situations (partner buyouts, multiple locations, mixed-use properties)
- They’re better at packaging loans that fall within SBA guidelines while maximizing benefit to the borrower
- They’ve seen thousands of deals and can quickly assess feasibility
Standard SBA Lender vs. Preferred Lender: The Process Compared
Standard SBA Lender Process
- Step 1: You submit your application to the lender
- Step 2: The lender underwrites and reviews your deal
- Step 3: If the lender likes it, they package and submit to the SBA Loan Processing Center
- Step 4: The SBA reviews the application (5-10+ business days)
- Step 5: The SBA may request additional information or conditions
- Step 6: SBA issues authorization
- Step 7: Loan moves to closing
Typical timeline: 60-90+ days
Preferred Lender Process
- Step 1: You submit your application to the lender
- Step 2: The lender underwrites, reviews, and approves using delegated authority
- Step 3: Loan moves directly to closing
Typical timeline: 30-60 days
That’s a massive difference, especially when you’re trying to close on a business acquisition with a purchase agreement deadline.
How Many Preferred Lenders Exist?
Not many, relative to the total number of SBA lenders:
- There are thousands of banks and credit unions authorized to make SBA loans
- Only a few hundred hold active PLP status at any given time
- The top PLP lenders are responsible for a disproportionate share of total SBA lending volume
- Some of the largest SBA lenders in the country are PLP participants (Live Oak Bank, Harvest Small Business Finance, Celtic Bank, etc.)
This concentration of expertise means that finding and accessing the right Preferred Lender for your specific deal is valuable — and that’s where a knowledgeable broker becomes essential.
Are There Any Downsides to Preferred Lenders?
A Few Things to Keep in Mind
While PLP status is overwhelmingly positive, there are a couple of nuances:
- PLP lenders sometimes have stricter internal credit standards because they’re taking on more underwriting responsibility. A deal that a standard lender might submit to the SBA “and hope for the best” may not fly with a PLP lender
- Not every PLP lender is right for every deal — they still specialize in certain industries, loan sizes, and deal types
- Being PLP doesn’t automatically mean best rates — you still need to compare terms across lenders
This is actually another reason working with a broker like GoSBA is so valuable. We know which PLP lenders are the best fit for specific situations, and we know when a non-PLP lender might actually be the better choice for a particular deal.
How to Find SBA Preferred Lenders
Option 1: Do It Yourself
You can search for Preferred Lenders on your own:
- The SBA’s Lender Match tool at sba.gov can connect you with lenders, but it doesn’t always filter by PLP status
- You can call the SBA directly or visit your local SBA district office
- Search for “SBA Preferred Lender” in your area, though geography matters less than it used to since many PLP lenders operate nationally
- Ask lenders directly: “Do you have PLP status?” — they’ll be happy to tell you if they do
The challenge with the DIY approach is that finding a PLP lender is only half the battle. You also need one that:
- Specializes in your loan size
- Has experience in your industry
- Has competitive rates and terms
- Is actually accepting new applications (some have capacity limits)
- Is a good fit for your specific deal structure
Option 2: Let GoSBA Do the Heavy Lifting
This is what we do every day. Here’s how GoSBA approaches lender matching:
- We maintain relationships with 50+ SBA lenders, many of which are top Preferred Lenders
- We know each lender’s sweet spot — their preferred industries, loan sizes, credit thresholds, and deal structures
- We match your specific deal to the lenders most likely to approve it quickly and on the best terms
- We handle the application packaging so your deal arrives at the lender in pristine condition
- Our service costs you nothing — we’re compensated by the lender upon successful closing
Having funded $320M+ in 2025, we have real-time knowledge of which lenders are currently active, competitive, and closing deals efficiently.
What About SBA Express Lenders?
A Related But Different Designation
You might also encounter the term “SBA Express Lender.” Here’s how it relates:
- SBA Express is a separate program for loans up to $500,000
- Express lenders can use their own forms and procedures, making the process even faster
- Turnaround can be as quick as 36 hours for approval
- The SBA guarantee on Express loans is 50% (vs. 75-85% on standard 7(a))
- Many PLP lenders also participate in the Express program
For smaller loan amounts where speed is critical, SBA Express through a Preferred Lender can be incredibly fast.
Questions to Ask Any SBA Lender Before Applying
Whether you find a lender on your own or work with GoSBA, here are important questions to ask:
- “Do you have Preferred Lender (PLP) status?”
- “How many SBA loans did you close last year?”
- “What’s your average timeline from application to funding?”
- “Do you have experience with my industry?”
- “What’s your minimum and maximum loan size?”
- “What credit score do you require?”
- “What spread above prime do you charge?”
- “Who will be my point of contact throughout the process?”
The answers to these questions will tell you a lot about whether a lender is right for your deal.
The Bottom Line: Preferred Lender Status Is a Quality Indicator
When the SBA grants a lender Preferred status, it’s telling you something important: this lender has proven they know what they’re doing with SBA loans. That translates to faster approvals, smoother processes, and fewer headaches for you.
But finding the right Preferred Lender for your specific deal — that’s where expertise and relationships matter.
Let GoSBA Match You with the Right Lender — For Free
Why spend weeks researching lenders when we’ve already done the work? GoSBA Loans has built relationships with 50+ of the top SBA lenders in the country, including many of the most active Preferred Lenders.
- ✅ We match your deal to the perfect lender — PLP or otherwise
- ✅ Free business plan and financial projections ($2,500-$5,000 value)
- ✅ $320M+ funded in 2025
- ✅ Our service is 100% free to borrowers
👉 Contact GoSBA Loans Today — Get Matched with the Right SBA Lender
