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SBA Hot Topic Tuesday — What is Wrong with the SBA 504 Loan Program?

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January 23, 2018

By Bob Coleman
Editor, SBA Hot Topic Tuesday

SBA Hot Topic Tuesday — What is Wrong with the SBA 504 Loan Program?

Buried in the avalanche of SBA news last week — the SBA 7(a) oversight hearing and looming federal government shutdown — was a Friday afternoon letter from NADCO expressing frustration with the new SBA SOP and its impact on CDCs and SBA 504 lending.

So what is happening?

The number are stark.

While SBA 7(a) lending has experienced robust growth — a 67% increase since 2012, SBA 504 loan approvals have decreased 25% during the same period.

Fiscal Year SBA 504 FY Approvals SBA 7(a) Approvals
2017 $5 billion $25.4 billion
2016 $4.7 billion $24.1 billion
2015 $4.3 billion $23.6 billion
2014 $4.2 billion $19.2 billion
2013 $5.3 billion $17.9 billion
2012 $6.7 billion $15.2 billion

Please tell me what you think in this poll. We will compile and publish your responses next week.

My employer is a
CDC
SBA 7(a) Lender
SBA
Other

What is your opinion of the SBA 504 lending program?
Working as intended
Needs tweaks, but it is fine
It’s ok, but difficult at times
SBA regulations are making it unmanageable

Do you believe the new SOP works for CDCs
Yes
There are challenges, but we’ll make them work
If we fix one or two major items we’ll be fine
No, we can’t operate this way
No opinion

The credit elsewhere provision in the new SOP for SBA 504 lending is:
A severe detriment
A challenge we’ll work through
OK
No opinion

The changes in equity injection in the new SOP for SBA 504 lending is:
A severe detriment
A challenge we’ll work through
OK
No opinion

The Debt Refinance provision in the SOP for SBA 504 lending is:
A severe detriment
A challenge we’ll work through
OK
No opinion

The change in the personal guaranty requirement for SBA 504 lending is:
A severe detriment
A challenge we’ll work through
OK
No opinion

Is there one thing you want fixed?

Final Open-ended Question — What other changes would you like to see in the SBA 504 loan program.

Access the “What is Wrong with the SBA 504 Loan Program” Poll here

Future Coleman Webinars

How to Prepare the SBA Credit Memo under the New SBA SOP 5010 5 (J)
Wednesday, January 24

Are you Ready for 2018 PARRiS Review?
Wednesday, January 31

Documenting SBA Loan Equity Injection: Know New SBA SOP Rules to Avoid Costly SBA 7(a) Guaranty Repairs and Denials
Wednesday, February 7, 2018

Now! You can manage your Coleman Report emails here.
Feedback welcomed at bob@colemanreport.com

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