C-Suite Wednesday — SBA Wish List; Express to $1 Million, 504 to $6.5 Million, Authority to Fine Lenders

April 24, 2019

By Bob Coleman
Editor, C-Suite Wednesday

C-Suite Wednesday — SBA Wish List; Express to $1 Million, 504 to $6.5 Million, Authority to Fine Lenders

A couple of weeks ago the Senate Small Business committee held a hearing about reauthorizing its SBA 7(a) and 504 loan programs.

Associate Administrator for the SBA Office of Capital Access, Bill Manger outlined SBA’s wish list to update its programs.

Here are the bullet points of his testimony.

  • SBA wants to increase the Express Loan limit from $350,000 to $1,000,000.
  • The authority to introduce an annual fee not to exceed .05 percent per year of the outstanding balance of pool certificates. This provides the SBA with additional flexibility to manage expected costs of the 7(a) Secondary Market Guarantee Program.
  • The authority to increase the total maximum dollar amount that a small manufacturer may borrower, per project, in 504 loans from $5.5 million to $6.5 million.
  • Our SBA One Platform has really simplified our loan process for so many of our lending partners. I think it’s important to share with you how our process improvements have vastly improved turn-times for SBA loans. For example, over the last two years, Small Loan approval times, which are loans of less than$350,000, have decreased from 6 days down to 2.
  • Loans of $350,000 and over, have also drastically improved their approval times from an average of 15 days to 8 days, a significant gain in efficiency over the last two years.
  • Our Lender Match Tool serves as a perfect example of how the government can use technology to improve our public-private partnership. To date, Lender Match has produced over 4 million email leads for small business borrowers in search of financing assistance. These leads have resulted in over 185,000 small business borrowers receiving a “lending match” with an approved SBA lender.
  • We are continuing to modernize and streamline our programs and are revamping our website to be more user-friendly. It is crucial that SBA continues to innovate and keep up with an increasingly digital credit marketplace.
  • In addition to these innovative steps, OCA’s Office of Credit Risk Management, known as OCRM, continues to make changes to the staffing and methodology it employs to provide lender oversight and portfolio monitoring. As you know, the Small Business 7(a) Lending Oversight Reform Act of 2018 codified OCRM and established several requirements for the division. One of these requirements calls for development of a new regulation to define OCRM’s authority in supervision and enforcement of 7(a) Lenders. This rulemaking has been drafted and is in review. It incorporates for the first time the option for a civil monetary penalty for egregious lender activity.