May 6, 2014
By Bob Coleman
Editor, Coleman Report
I’m back in town after leading the “Hot Topic” Third Party Lender breakout session at the Broadmoor Hotel in Colorado Springs last week.
Thanks to the panelists for taking their time to inform session attendees their view of the SBA 504 industry:
Donald DiMartini, Citi Bank
Matt Hunt, Zions Bank
Bob Judge, Government Loan Solutions
Ken Rosenthal, CDC Small Business
Patrick Kelley of the SBA.
Here are the top ten takeaways from that session in no particular order:
1) The SBA 504 Secondary Market continues to expand and is viable
2) There are five active SBA 504 Secondary Market participants:
• Zions Bank
• Pennant Fund
• One West Bank
• Thomas USAF
• Morgan Stanley
3) Lenders continue to see higher than historical 504 loan approval rejections, or screen outs
4) SBA 504 meets 70% of SBA’s underserved mission criteria, SBA 7(a) is 72% (Low income areas, veterans, minority-owned businesses, etc)
5) SBA continues to develop SBA One—a software platform to streamline SBA 504 and 7(a) loan processing and servicing
6) The FMLP secondary market program served its stimulus purpose, and is being replaced with private sector players
7) SBA 504 loan numbers are down due to the expiration of SBA 504 refinance of expansion of CRE lender credit boxes
8) SBA 504 refinance is critical to the needs of Main Street, and is a top priority of NADCO
9) SBA 504 is a different product than SBA 7(a) financing and CDCs must work with lenders to compare and contrast the two programs. They are not necessarily in competition with one another.
10) It gets very cold in Colorado in early May at 6,000 feet!