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SBA Hot Topic Tuesday—A New Lender Risk Rating System

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April 29, 2014

By Bob Coleman
Editor, Coleman Report

SBANoticeLogo1) New Lender Risk Rating System
This notice implements changes to the Small Business Administration’s (SBA’s) Risk Rating System. The Risk Rating System is an internal tool to assist SBA in assessing the risk of the SBA loan operations and loan portfolio of each active 7(a) Lender and Certified Development Company (CDC) SBA loan operations and loan portfolio. Consistent with industry best practices, SBA recently redeveloped the model used to calculate the composite Risk Ratings to ensure that the Risk Rating System remains current and predictive as technologies and available data evolve.

2) SBA Approval of Recoverable Expenses on 7(a) Loans (SBA Information Notice 5000-1311

SBA is announcing a change to Standard Operating Procedure (SOP) 50 57 (7(a) Loan Servicing and Liquidation), which modifies the time periods when lenders may submit requests for approval of Recoverable Expenses, including those deducted from recoveries, on 7(a) Loans.

Effective with the date of this notice, such requests may only be submitted:

1. With the Lender’s Purchase Package, or
2. With the Lender’s Wrap-up Report.

Previously, lenders were permitted to submit Recoverable Expense requests after guaranty purchase when aggregate expenses totaled $5,000 or more, in addition to the two times referenced above. SBA is eliminating this option to streamline operations as part of its continuing effort to provide its lending partners with a high level of customer service and faster response times on all lender requests, including guaranty purchase requests.

3) Revised Form — Eligibility Information Required for 504 Submission (Non PCLP)

 

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