In our previous post, we covered what happens to SBA loans during a government shutdown. Now let's talk about what happens when the shutdown ends—and why the type of lender you choose makes all the difference in how quickly you can get funded.
Not all SBA lenders are created equal. Some can hit the ground running the moment the government reopens. Others? They're stuck in line, waiting their turn.
What's a PLP Lender?
PLP stands for Preferred Lender Program, and it's the SBA's designation for lenders who've demonstrated consistent performance and deep expertise in SBA lending.
Here's how it works: Most SBA lenders have to submit every loan application to the SBA for review and approval. The SBA looks over the paperwork, evaluates the credit decision, and then—if everything checks out—issues their guarantee. This process can take weeks, even under normal circumstances.
PLP lenders, on the other hand, have been granted delegated authority by the SBA. They can approve loans in-house without waiting for the SBA to review their credit decisions. The SBA still provides the guarantee, but they trust PLP lenders to handle the underwriting and approval process themselves.
Think of it like TSA PreCheck for SBA lending. You still go through security, but you've got the express lane.
Why This Matters After a Shutdown
When a government shutdown ends, the SBA comes back online with a backlog. Every loan that's been sitting in queue during the shutdown needs processing. Every non-PLP lender is waiting to submit applications for review. It's a bottleneck.
PLP lenders skip most of that line.
Here's the difference in real terms:
Non-PLP Lender Process:
- Submit application to SBA for review
- Wait for SBA to evaluate credit decision
- Wait for SBA to issue loan number
- Wait for final SBA approval
- Receive authorization to fund
PLP Lender Process:
- Submit approved loan to SBA through eTran system
- Receive SBA loan number (often within hours)
- Receive authorization to fund
The eTran Advantage
The eTran system is the SBA's electronic loan processing platform. It's how lenders communicate with the SBA and how approved loans get their guarantee numbers.
When a shutdown ends, PLP lenders can immediately start submitting approved loans through eTran. Because they've already done the underwriting and credit approval, they're just getting the final authorization number. It's a quick turnaround—sometimes same-day, often within 24-48 hours once the system is back up.
Non-PLP lenders are submitting applications that still need full SBA review. They're competing for attention with hundreds or thousands of other applications in the queue.
Other Benefits of Working with a PLP Lender
The speed advantage after a shutdown is significant, but it's not the only reason to choose a PLP lender:
Faster approvals year-round. Even when there's no shutdown, PLP lenders can move quicker because they're not waiting on SBA review timelines.
Deeper expertise. The SBA doesn't grant PLP status lightly. These lenders have demonstrated consistent performance, strong underwriting standards, and deep knowledge of SBA lending requirements.
More control over your timeline. Because PLP lenders make the credit decision, they can communicate clearly about where your application stands and what to expect next. No waiting to hear back from a third party.
Fewer surprises. PLP lenders know exactly what the SBA requires because they're applying those standards themselves. That means they can spot potential issues early and work with you to address them before they become problems.
What This Means for You
If you're applying for an SBA loan during a government shutdown—or you're worried one might happen while your loan is in process—working with a PLP lender gives you the best shot at minimal delays.
No one can control when shutdowns happen or how long they last. But PLP lenders can control how quickly they move when the doors reopen. And with delegated authority and direct access to eTran, they're positioned to get you funded as fast as possible.
Live Oak is proud to have PLP status and has guided thousands of borrowers through every kind of lending environment—including multiple government shutdowns.
When the government reopens, Live Oak is ready to move.
