When a client comes to you for business financing, but you’re unable to do the deal, you have a choice. You can either let the client walk out the door, taking their future business and referrals with them, or find them a path forward. This is where Grow America’s Second Look program comes in.
Our Second Look program works as a bridge between traditional lending institutions and small business owners who need financing but don’t meet traditional lending requirements. Offering your client this option is a great way to support their goals and maintain a relationship with them as their business grows, but presenting it in a way that doesn’t leave them feeling declined, deprioritized, or passed off can be a challenge.
Here, we share practical language and positioning strategies to help you successfully lead your clients to a Second Look.
Misconceptions that keep lenders from making the referral
Some lenders hold back because they’re worried about the relationship with their client. They feel that a referral will potentially send their client to the wrong fit, or that it will look like they’re just passing them off. In reality, a Second Look exists specifically for clients who just miss conventional requirements. You stay involved throughout the process, and your client sees that you’re still in their corner.
Other lenders hold back thinking that a formal contract needs to be in place in order to make a referral. It doesn’t—there’s nothing to sign and nothing to lose by referring a strong client.
Once you see past these assumptions, referring a client for a Second Look isn’t a matter of if, but when.
Reading the room: When to bring up a Second Look option
There are a couple of natural windows for introducing Second Look: early in the underwriting conversation, before your client becomes attached to one outcome, and at the first sign of a structure challenge.
Finding a natural opening makes this conversation easier, so be on the lookout for these signals that a Second Look might be a good option:
- If there is a collateral shortfall, we are still willing to review the request and consider financing based on the overall strength of the business and the opportunity.
- If the business misses cash flow requirements, our debt service coverage ratio (DSCR) minimum is the same as the SBA’s (1.15:1).
- If there is a credit blemish, we consider the circumstances surrounding it and can still lend if there is a compelling story.
- If the business is located in an underserved area, we take that into consideration. In fact, over 60% of our lending is in low- to moderate-income census tracts.
- If the business is a start-up, we can consider it provided it’s a strong start-up with cash and collateral.
- If your institution can’t lend to a specific industry, we’re able to lend to most industries with few restrictions.
- If the request is outside of your geography, we can lend in all 50 states.
Ready-to-use scripts
Having the tools to start the conversation naturally will make it much easier to chat about a Second Look with your clients. These scripts will get you started:
- When raising SBA early in the process:
- “Based on what you’ve shared, I want to make sure we look at the full picture, including SBA options through our partner, Grow America, that might give us more flexibility on structure. Let me walk you through what that could look like alongside our conventional path.”
- When a deal hits a conventional underwriting wall:
- “We’ve done a thorough look on the conventional side, and I want to keep working for you. There’s a partner that offers SBA loans that I think fit your situation well, and it gives us more room on terms. I’d like to walk you through it.”
- When a client seems uncertain about being referred:
- “I work with a partner that specializes in exactly this type of deal. Don’t worry, I’m not handing you off completely. I’ll stay involved, and this is how I get deals like yours across the finish line.”
- When a client pushes back or seems concerned:
- “I understand this feels like a detour, but SBA is a mainstream financing tool. Some of the strongest businesses I’ve worked with have used it. The goal is the same: getting you the capital you need on terms that work.”
- When you also offer SBA loans, but the deal is outside of your credit requirements:
- “SBA is the right path, but we’re not the right SBA lender. We have a trusted partner who could be a better match.”
In these conversations, confident delivery and framing the Second Look as a collaborative process will go much further than an apologetic or uncertain delivery and protect the relationship long-term.
Protecting the client relationship
Strong communication between you, your client, and our team is what makes the Second Look work because your client sees that you’re in their corner. In fact, clients who receive a loan through a Second Look path often return to the referring lender for future loans and financial products. They also refer others to you because they remember how you helped them navigate the process and reach their goals.
How you approach this handoff is really up to you. Some lenders choose to stay in close communication, while others are comfortable checking in once in a while. To support good communication, we provide an online portal with an up-to-date status for each deal you’ve referred. This creates real-time confidence that your clients are moving forward.
Make Second Look part of your lending toolkit
Finding the right capital for your clients and guiding them to the right fit, even if it’s not at your institution, creates an ongoing and supportive relationship. When you build Second Look conversations into your standard client process, you’re truly invested in their success.
Reach out to us today to learn how our referral process works and what deals are a fit, so you can walk into your next client meeting with another tool in your lending toolkit.
