SBA Hot Topic Friday — SBA Lender Guaranteed Disaster Loans?

September 1, 2017

By Bob Coleman
Editor, SBA Hot Topic Friday

SBA Hot Topic Friday — SBA Lender Guaranteed Disaster Loans?

I received an interesting email today from a lender regarding SBA disaster loans and Texas:

I was thinking about the Texas flood disaster and the amount of effort that will require for the Government to deal with tens (or hundreds )of thousands of disaster loan applications. The Government process is just not equipped to go from a relatively small program to that level of volume overnight. Handling that level of volume will clog their accounting system if nothing else.

They have, however, built a capability in the banking community through the SLA program. Nationwide volume SLA lenders (of which we are one) could handle everything except the loss verification (which might be available from auctioneer/appraisers) on the smaller (under $300K disaster loans). Have you heard any discussions about this in SBA?

NOTE: We have done loans in both Texas and Louisiana and have begun to issue deferments

Please take our one-minute poll and offer your thoughts.

Do you support the idea of lender issued SBA small business guaranteed disaster loans?

What guaranty would your institution need to participate in the program?

What do you think would be your institution’s level of support for lender SBA disaster loans?
We have a market presence in Houston and could accept applications next week
We don’t have a market presence in Texas but we’ll open up a office and send staff ASAP
We would make the program only available to our existing customers.
Thanks, we’re not interested as it’s too far out of our footprint.

Disaster loans are capped at 4% by Congress. What type of subsidy, if any, should SBA give your institution.

Any additional comments?