October 4, 2016

SBA Hot Topic Tuesday — OIG Says SBA 504 Liquidation “Effective” — Suggests Formal Training

sbaoigBy Bob Coleman
Editor, SBA Hot Topic Tuesday

SBA’s Inspector General revisited SBA 504 liquidation procedures by Fresno and Little Rock in their end of the year report.

The takeaways?


1) SBA 504 liquidations have stabilized and are approaching pre-Great Recession levels.

2) “We believe management and monitoring of the 504 liquidation portfolio at the CLSCs during FYs 2015 and 2016 was effective.”

3) “Additionally, SBA CLSCs generally maximized recovery when liquidating the 504 loans we reviewed.”

4) The OIG discovered Fresno and Little Rock use different internal manuals and recommends the development of one manual.

5) Training is problematic as 39% of staff says SBA is not providing “adequate” training. OIG recommends implementing a formal training program. “In the face of likely turnover due to a large number of retirement eligible employees, the lack of a formalized training program could represent a significant barrier for new or inexperienced employees to effectively liquidate 504 loans, maximize recoveries and reduce loan losses.”

Read the 11-page report here.