Credit Reporting – S&L Newsletter

Whenever a business applies for a loan, lenders use business credit reports to assess the business’s
creditworthiness. Business credit reports are used when businesses apply for a business loan, establish payment terms with a new vendor, or obtain a form of business credit. These reports come from three primary commercial credit reporting agencies: Dun & Bradstreet, Equifax, and Experian. Each agency collects and combines the data of millions of businesses to create business credit reports and calculate a credit rating.

SBA is required to report commercial accounts to credit reporting agencies, so on a quarterly basis, SBA reports to two of the major credit reporting agencies and to the other major reporting agency on a monthly basis. Their credit reports include current loans across the loan portfolio (including direct lending programs) and delinquent loans from the 7(a) and 504 loan programs. Data from pandemic loans such as charged-off PPP loans and both current and delinquent EIDLs.

SBA reports the combined balance of all loans after SBA charge-off, i.e., both the lender and SBA shares, to appropriate credit reporting agencies and federal delinquent debtor databases such as CAIVRS.

SBA officials stated they report commercial credit data to Experian, and they use data from Experian to
determine if an applicant is creditworthy for its loan programs. Recently, the Inspector General found that
SBA is lacking sufficient communication and coordination with Experian, and as a result, SBA is
missing the opportunity to fully hold delinquent borrowers accountable and increasing the risk that
delinquent borrowers could obtain future loans when their creditworthiness could indicate they should not.

From the Coleman SBA 7(a) Loan Servicing & Liquidation newsletter – published weekly.

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