September 9, 2021
By Joseph Coleman
Contributing Editor, Coleman Report
ARLINGTON – SBA lenders met at the Mid-America Lenders Conference this week prompting discussions about record 7(a) and 504 lending growth for FY21.
As a result, there was a rise in screen outs and origination processing issues.
The number one reason for 7(a) screen outs (34%) was Financial Statements/Projections according to SBA Lender Relations Specialist Michelle Torres, Dallas/Fort Worth District Office, who presented the top 7(a) and 504 Screen Outs for the last 12 months.
7(a) Screen Outs
- Financial Statements/Projections
- Affiliate financial statements missing or incomplete
- Personal Financial Statement incomplete
- Projections missing or assumptions not included
- Pro-forma Balance Sheet missing or incomplete
- Historical financial statements missing or incomplete
- Seller financial statements missing or incomplete
- Interim Income Statement and/or Balance Sheet missing
- Debt schedule missing or incomplete or doesn’t match balance sheet debt
- Credit Memo Incomplete
- Forms 1919 and 1920
- Debt Refinance
- Credit Not Available Elsewhere
- Change of Ownership
*The Top 6 categories account for over 80% of the Total Screen Outs in last 12 months.
504 Screen Outs
- Authorization Errors
- Incomplete Documentation
- Data submitted to ETRAN not Accurate
- Eligibility Issues not Addressed
- Project Cost not Properly presented
- Exhibits not summarized where appropriate
- P&L Spreads not Accurate
- Financial Analysis not Accurate
- Pro-Forma BS not accurate
- BS and Debt Schedule do not Reconcile