Live Oak Bank Review: Expedited SBA Loans

Live Oak Bank
Live Oak Bank

Live Oak Bank Review: Expedited SBA Loans

We recommend Live Oak Bank to anyone looking to work with an experienced lender that offers SBA loans at extremely competitive rates.

Good for

  • Borrowers looking for affordable SBA loans.
  • Borrowers looking for faster SBA loan processing.
  • Borrowers with very strong financials.

Bad for

  • Borrowers looking for loans smaller than $250,000.
  • Borrowers with poor credit scores and low cash reserves.
  • Borrowers looking for a variety of financing options.

Editor's Rating

4.5/5.0

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Live Oak Bank is an ideal lender for those who need loans above $250,000. This bank issues Small Business Administration-backed loans, which are competitively priced and come with terms you won't typically find on loans through online lenders. With more than $850 million in SBA loans closed, Live Oak Bank is certainly one of the most well-known and experienced issuers of these loans. However, businesses with weaker credit scores, low cash reserves or short times in operation may be better off exploring other financing options.

Live Oak Bank Review: Should You Apply?

Live Oak Bank is highly recommended for any borrower looking to obtain a large SBA loan (over $250,000) quickly. Due to the high volume of SBA loans that Live Oak Bank deals with, they've obtained a status as a preferred lender, which allows them to process SBA applications more quickly than other banks. Traditionally, they've granted SBA loans up to $5 million with APRs of 5.50% - 7.75%.

ProsCons
  • Faster SBA application turnaround.
  • SBA loans are often the cheapest and largest loans available.
  • Lender with extensive experience in various areas of small-business lending.
  • Businesses with weak credit scores, low cash reserves and a short time in business may not qualify.
  • SBA applications still takes longer than applications with online lenders.
  • Only serves businesses in select industries.

Live Oak Bank Pros

The biggest advantage that Live Oak Bank has over other SBA lenders is its status as a Preferred Lending Partner (PLP). SBA loans are notorious for taking time to process, but Live Oak Bank is able to shorten that process to an average of 45 days. Compare that to the turnaround time of several months at other non-PLP banks.

Live Oak Bank also specializes in select industries. This prevents some businesses from getting approved, but it also means Live Oak Bank can specialize in the financing needs of the industries it serves. It can be immensely helpful to have your borrower understand your challenges when explaining your financing needs. Live Oak Bank dedicates specialists for each industry, so you'll work with an experienced representative.

Supported Industries

  • Accounting and tax firms
  • Agriculture
  • Automotive care
  • Educational services
  • Energy and environmental lending
  • Entertainment centers
  • Fitness centers
  • Franchise restaurants
  • Funeral home and cemetery
  • Government contracting
  • Health care
  • Hotels
  • HVAC / plumbing / electrical service contractors
  • Insurance
  • Internet service providers
  • Investment advisory
  • Pharmacy
  • Self storage
  • Senior care
  • Veterinary
  • Wine and craft beverages

Live Oak Bank also has experience working with companies that are considering acquiring, expanding and refinancing. Your business can benefit from Live Oak Bank's diverse experience no matter your financing needs.

Finally, Live Oak Bank strives to keep its SBA loans as affordable as possible. Even compared to other SBA lenders, Live Oak Bank tends to fall toward the cheaper end of the market. Loans average $1.1 million, and Live Oak Bank sets a maximum APR of 7.75%. SBA loans can be priced as high as 10%, so Live Oak Bank's limit is noticeably lower than the SBA's maximum limit.

Live Oak Bank Cons

It may be difficult to qualify for a loan with Live Oak. If you don't fall into one of its select industries or you don't have a very strong application, you likely won't be approved.

Additionally, Live Oak Bank still takes longer to process an application than, say, an online lender would. Most online lenders are able to process application decisions within a matter of hours or one to two business days. Despite Live Oak Bank's status as a PLP, its applications still take far longer than other new alternative options available in the market. However, keep in mind that those faster lenders will usually have much higher APRs and smaller loans.

Eligibility Criteria

You'll need to be able to meet SBA requirements if you want to borrow from Live Oak Bank. Live Oak Bank may apply stricter requirements than the SBA based on varying factors, but at a minimum, applicants will have to meet the following qualifications

  • Minimum personal credit score: 680
  • No recent bankruptcies

Features, Rates and Terms

Borrowers may be relieved to see that Live Oak Bank uses APRs to define the costs of its loans, unlike many other online lenders. The APR is inclusive of all fees and rates, but most importantly, it's the most widely used metric to define the cost of a loan or line of credit. This allows for you to make an apples-to-apples comparison.

Live Oak Bank's SBA loans have the following features.

Loan amount range$75,000 - $5 million
Total interest percent5.50% - 7.75%
FeesVaries
Financing terms5 - 25 years
Repayment optionsVaries
Collateral requiredVaries
Personal guarantee requiredVaries

Live Oak Bank Application Process

Borrowers interested in applying for an SBA loan with Live Oak Bank should contact a specialist to discuss their needs and eligibility. We recommend preparing documents ahead of time to ensure your application is processed as quickly as possible. Any of the following information may be required during the application process.

  • Social Security numbers for all business owners and your company's employer identification number (EIN)
  • Both personal and business tax returns
  • Your resume
  • Personal and business bank statements
  • Relevant operating licenses
  • Any business legal documents

Following submission, you should hear back within about 45 days. This is far faster than similar SBA loan applications at other banks that aren't PLP lenders. However, if speed is a major concern for you, you might want to explore non-SBA loans from online lenders. These entities can typically process applications within hours or a few days. Be aware that this route will be far more costly, and you likely won't be able to obtain a loan above $250,000.

How Does Live Oak Bank Compare to Other Lenders?

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As mentioned before, Live Oak Bank is a top lender for SBA loans. They have extensive experience in lending SBA loans, and their status as a PLP lender helps expedite SBA loan applications. However, they only lend to certain industries that we've listed above and only consider businesses with strong financials. If your business does need to look elsewhere for SBA or non-SBA financing, there are many options that can be just as competitive.

Live Oak Bank vs Celtic

Celtic Bank
Celtic Bank

Celtic and Live Oak are comparable, as they're two of the top SBA loan originators in the country. However, we'd prefer Live Oak Bank here simply because Celtic Bank doesn't disclose much information about the SBA loans they issue. However, Celtic Bank does have slightly more lenient requirements because it doesn't restrict applicants based on industry as heavily as Live Oak does. If you don't meet Live Oak Bank's requirements, Celtic Bank is a perfectly fine alternative.

Live Oak Bank vs Smart Biz

SmartBiz
SmartBiz

Smart Biz doesn't issue loans directly. Instead, it connects qualified borrowers with lenders in their network. Because of this middleman effort, Smart Biz will tack on more fees than a direct lender would, such as Live Oak. Because borrowers know exactly what they're getting with Live Oak Bank in terms of industry and SBA expertise on top of the cheaper rates, we'd recommend Live Oak Bank over Smart Biz. However, Smart Biz can quickly check if you prequalify for SBA loans. If you're unsure you want to commit to filling out the entire application before hearing a response, Smart Biz may be a better option for you.

Live Oak Bank vs Online Lenders

Live Oak Bank is a top lender for those looking for large loans, very competitive rates and deep industry expertise. However, if you operate a newer business, don't have a great personal credit score or want a smaller loan, an online lender might be a better option. Of course, you'll pay higher fees and APRs with an online lender. But if you can't qualify for a loan from a traditional lender like Live Oak Bank, your next best option is an online lender.

Comments and Questions

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