The job of the intermediary is to work with the applicant to make sure the business plan is complete and the application is both eligible and has credit merit. If the intermediary is satisfied that the application has a chance for approval, it will send it to the SBA for processing. To find out whether there is a prequalification intermediary operating in your area, contact your local SBA office. Note: Small Business Development Centers serving as intermediaries do not charge a fee for loan packaging. For-profit organizations will charge a fee.

Once the loan package is assembled, it is submitted to the SBA for expedited consideration. The SBA conducts a thorough analysis of the case, using the same time frame and degree of analysis that it uses when processing requests under the normal method of delivery process.

If the SBA decides the application is eligible and has sufficient credit merit to warrant approval, it will issue a commitment letter on behalf of the applicant. The commitment letter, or prequalification letter, indicates the SBA's willingness to guarantee a loan made by a lender under certain terms and conditions. The intermediary then helps the borrower locate a lender offering the most competitive rates; the applicant takes the letter and its application documents to a lender for a decision.

Policies Specific to the Prequalification Program

The maximum loan amount for this pilot program is $250,000. Interest rates, maturities, collateral policy, and guarantee percentages all follow the standard 7(a) loan program.