Underwriting Collateral for the SBA 7(a) Loan Credit Memo – Webinar 11/6

Guidance of SBA’s “All Available Collateral” vs the “Do What You Do” Rule

A Coleman Webinar
Date: Wednesday, November 6, 2024
Time: 2:00 p.m. Eastern
Includes e-certification & recording

Pay with Stripe —
$500 Single Email User License

Pay with Stripe —
$800 Unlimited Access License

The SBA Standard Operating Procedure SOP clearly states that your underwriting analysis must demonstrate how the borrower will repay the loan from cash flow, not liquidation of collateral.

In fact, the SOP explicitly states that a loan may be approved without full collateral coverage – the truly the definition of an SBA loan.

However, lenders must follow specific guidance points from the SBA:

All available collateral must be obtained up to 100% loan-to-value
Life insurance must be obtained when there is a collateral shortfall
New collateral rules apply for loans under $50,000
Specific collateral requirements exist for loans over $500,000
Lenders must adhere to the “do what you do” rule

Our source material comes from long-time experts in SBA lending, SBA SOPs, and a review of collateral underwriting mistakes made by lenders that resulted in a recommendation of guarantee denial by the SBA Inspector General.

One expert is Leslie Tripp, Director of SBA Consulting at Doeren Mayhew, who conducted a training webinar for Coleman providing real-world examples of SBA 7(a) loan exceptions based on her personal review of lender loan portfolios. Collateral underwriting made Tripp’s list of top 30 SBA 7(a) loan review exceptions in 2024.

She wrote in one lender exception:

“Analysis and discussion of collateral for a loan not fully secured does not provide justification for not requiring as collateral available equity and parcels of real estate owned by the business owner. Lender used liquidated value of personal residence instead of fair market value to determine if 25% equity was present and used insured value instead of lower appraised or fair market value.”

You will learn about:

Collateral underwriting and the “do what you do” rule
Adequacy of collateral
Collateral preference in piggyback structures
An examination of SBA’s collateral SOP loan policy
SBA’s definition of “fully secured”
Calculating personal real estate equity
Understanding the 25% exclusion lien rule
Calculating commercial real estate equity
Machinery and equipment collateral values
Leasehold improvement collateral values
Accounts receivable collateral value
Inventory collateral value
Cash on the balance sheet
All other asset collateral value
Underwriting the guarantor personal financial statement
Underwriting affiliate financial statements for collateral values
Underwriting real estate risk, including environmental, National Historic Site, and other tangible risks
UCC liens best practices
Construction issues
Collateral insurance
Collateral site visits
Closing the loan when the appraisal is lower than the loan amount
Financing real estate at 100%
Real estate collateral and changes of ownership loans
Business valuation appraisals and collateral
Single-purpose (i.e., hospitality and restaurants) collateral appraisal requirements
Life Insurance requirements and documentation

Click Here to Pay with Stripe

Download Registration Form

Coleman Report Webinar Benefits:

Coleman Report webinars provide solutions to problems that left unaddressed will jeopardize the SBA loan guarantee.
We give management the tools to create prudent credit boxes compliant with SBA’s standard operating procedures.
We train your staff to ensure compliance of existing and new SBA rules and regulations.
Tips that solve difficult SBA underwriting, servicing and liquidation challenges.

Your Training Staff

Lance Sexton
A former small business owner, Lance Sexton has a successful history of working with small business owners and students related to entrepreneurship and SBA loan origination, servicing, and liquidation. He has earned three industry training instruction awards for “Best Online Learning Product”. A former SBA Deputy Director of Little Rock Servicing Center, Lance has over 40 years of experience, including 20 years directly managing portfolios of SBA loans. Lance is an adjunct faculty member of University of the Ozarks. He is an Executive Vice President, Managing Director of Servicing and Liquidation at an SBA participant lender and has been affiliated with Coleman Publishing for over 10 years.

Bob Coleman
Bob Coleman is the founder of Coleman Publishing, a publisher of newsletters, reports, data, conferences, webinars, online training videos — to help finance professionals become small business lending experts. Bob is the nationally recognized expert on small business financing. He has appeared frequently on Fox Business News, NPR and other numerous media outlets. He is sourced by all print media. He is a frequent speaker about small business lending throughout the US and EU. Bob has a BA in Medieval History from the University of California Santa Barbara and a MBA in Real Estate Finance from the University of Southern California. Bob has earned numerous awards as a producer of events and video training. His passion is getting capital to Main Street and Rural American small business.

How the Webinar Works

We use Microsoft Teams as the webinar platform.
We will open the webinar for attendees to join at 1:30 pm ET. This will give each attendee thirty minutes before the webinar begins to troubleshoot any technical issues. Call (818) 790-4591 if you need assistance.

Recording
All Coleman webinars are recorded and a link is sent to all attendees.

Single Site License
The single site license grants your institution one viewing of the webinar. It is permissible to use a single site license on one device in a conference room to be viewed by multiple attendees The webinar can be viewed on any device.

Multiple Site License
A multiple site license is an unlimited access pass for anyone at your institution. You will be given a link that will be usable to anyone with your email domain.

Webinar Links and Handouts
The link will also be included when we send the presentation and handouts. These will be sent by eod the day before.

Participants Earn Certificates of Participation
All Coleman Webinar attendees will receive a certificate of participation. This documents your continuing education history for SBA and your regulators.

Questions
Questions throughout the webinar are strongly encouraged. There are two ways to ask a question. The first is to ask the question via the chat in Microsoft Teams. The second is to send an email to anna@colemanreport.com. Also, feel free to ask pre and post-webinar questions.

The Fine Print
1) Substitutions are allowed at no charge.
2) Cancellations receive a 100% credit for any Coleman product.
3) As with all our products, we offer a 100% money back satisfaction guarantee — no questions asked.

3 Easy Ways to Order
1) ONLINE — Register and pay online via Stripe
2) EMAIL –Send an email to cindy@colemanreport.com with “Webinar Registration” in the Subject Line. We will do all the paperwork and either send you a sales receipt or an invoice.
3) PHONE — Call us at 818-790-4591.