Let’s be real — if you’ve survived the jungle that is residential mortgage origination, you’re already a certified master of the financial universe. You’ve dealt with self-employed borrowers who write off everything from their office coffee to their dog’s dental plan, somehow managing to show $12 in taxable income and still found a way to get them approved for a mortgage.
You’ve handled buyers panicking at 10 p.m. because Zillow says their house is worth $5,000 less than yesterday. And yet, you keep grinding. Now, imagine using that same skill set to help small business owners who actually have money.
Welcome to the world of U.S. Small Business Administration (SBA) loans. If you can handle a first-time homebuyer who’s convinced they can afford a mansion on a barista’s salary, you’re more than ready for SBA 7(a) loans — and the commissions that come with them.
Emotional investment
Residential mortgage brokers are accustomed to a hustle that many other financial professionals just don’t get. When you’re dealing with a homebuyer, it’s not just about numbers on a page — it’s about dreams, expectations and emotional breakdowns over minor interest rate changes. You’re not just their financial adviser; you’re their therapist and coach.
This grind makes you perfectly suited to SBA loans. The SBA 7(a) loan is issued by banks or approved non-bank lenders, partially backed by the federal government, and can be used for business needs such as purchasing real estate, buying a business, installing equipment or obtaining working capital.
Like residential real estate, small business lending is also personal. For many small business owners, their business is their baby. Their personal and professional finances are intertwined. It takes a skilled hand like yours to guide them through the process. You’ve been dealing with complex financials and emotionally invested clients for years — so why not apply that expertise to a broader market?
Complex scenarios
One of the most notorious challenges mortgage originators face is qualifying self-employed borrowers. You know the type — they’re running a successful business but have taken every legal deduction, leaving their tax return looking like a college student’s bank account.
If you’ve successfully navigated that complexity and helped them get a mortgage, guess what? They’re likely running a profitable business — an ideal candidate for an SBA loan.
Small business owners are your bread and butter. They might not show all their income, but their thriving businesses need financing to grow. That’s where you swoop in with the SBA 7(a) loan.
Whether it’s working capital, equipment or commercial real estate, the SBA 7(a) loan has them covered. Here’s the best part — you can help them purchase a building with up to 100% financing, putting an end to leasing. You get to be the hero, helping them build equity while you collect the commission.
Translatable experience
Why should you, a residential mortgage pro, jump into the SBA lending world? Because you’ve already got the hard part down.
● Personal relationships. The deep relationships you build with homebuyers are the secret sauce when working with small business owners. They need someone they trust and you’ve already proven you’re that person.
● Understanding complex financials. If you’ve managed to get a mortgage approved for a client with zero W-2s in sight, you’re ready for SBA loans. Business owners’ finances are often intertwined, and your experience untangling them is invaluable.
● New revenue stream. SBA loan originators can earn 1%-2% of the loan amount. With loans ranging from $250,000 to $5 million, a single deal could net $10,000 to $20,000. That’s a serious payday.
Growing market
Small business owners are hungry for financing, and the market is growing. Whether it’s to expand their business, buy equipment, refinance debt or acquire commercial real estate, there’s no shortage of opportunities for SBA 7(a) loans.
And unlike dealing with that borrower who keeps trying to scrape up 3% down on a home purchase, these business owners have cash flow. They just need someone like you to help them get the financing they need to take things to the next level.
SBA 7(a) loans can finance a wide variety of business needs, but where they really shine is in commercial real estate. Imagine telling your client that they can buy the very building they’re leasing and get 100% financing. That’s like telling a first-time homebuyer they don’t need a downpayment — it’s an offer too good to pass up. When you’re the one making that offer, you’ll quickly become their go-to person for all things finance.
Consistent commissions
As an SBA loan originator, you get paid referral fees, much like how you’re compensated on the back end of residential deals. The standard fee for originating SBA loans is 1%-2% of the loan amount.
Do the math on that for a $1 million loan, and you’re looking at a cool $10,000 to $20,000 per deal. And let’s not forget the sweet spot for SBA loans — between $250,000 and $5 million. This is where most business owners are looking for financing, and where you, as the originator, can see a steady stream of deals and consistent commissions.
Unlike residential loans where you’re dealing with Federal Housing Administration limits or loan caps, SBA loans give you the flexibility to work with much larger amounts. So instead of spending your time on multiple smaller deals, you can focus on fewer, higher-value loans and still see a significant payday.
Initial steps
The move from residential mortgage origination to SBA lending isn’t just a good idea — it’s a gold mine waiting to be tapped. Here’s how to get started. Start by identifying the small business owners you’ve already helped with residential loans. They’re prime candidates. If they trusted you with their home, they’ll trust you with their business needs, too.
Partner with SBA lenders. Don’t go it alone. Work with banks or non-bank SBA lenders that specialize in 7(a) loans. They’ll provide the back-end support while you focus on originating deals and growing your network.
While you don’t need to be an SBA encyclopedia, knowing the basics of SBA 7(a) loans will go a long way. Understand how to structure a deal, how the SBA guarantee works and how to navigate the application process.
Just like you’ve built relationships with real estate agents and buyers, start connecting with business brokers, commercial real estate agents and financial advisers. These connections can help you expand your deal flow and position you as the go-to SBA expert.
