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WPASGL Small Business Lending Conference Seven Springs Mountain Resort March 13, 2014 SBA Office of Financial Assistance Linda Rusche, Director 1.

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Presentation on theme: "WPASGL Small Business Lending Conference Seven Springs Mountain Resort March 13, 2014 SBA Office of Financial Assistance Linda Rusche, Director 1."— Presentation transcript:

1 WPASGL Small Business Lending Conference Seven Springs Mountain Resort March 13, 2014 SBA Office of Financial Assistance Linda Rusche, Director 1

2 SBA Loan Programs Tools that enable lenders to meet the needs of their small entrepreneurs Public/private partnership Creating jobs Stimulating economic activity 2

3 7(a) & 504 Portfolio Overview 3 Gross Active Balance$59,303,856 Active Loans235,296 Current Balance$55,663,081 Past Due Balance$490,515 Deferred Balance$122,484 Delinquent Balance$769,284 Liquidation Balance$2,258,491 Non-Current Balance$3,640,775 Active Purchases$6,164,557 Total Exposure$65,468,414 Note: dollars in thousands Data as of December 31, (a) Balance Sheet Gross Active Balance$27,142,193 Active Loans60,927 Current Balance$25,858,842 Past Due Balance$101,105 Deferred Balance$79,683 Delinquent Balance$371,015 In Catch-up Balance$731,546 Non-Current Balance$1,283,351 Active Purchases$1,566,930 Total Exposure$28,709,123 Note: dollars in thousands Data as of December 31, Balance Sheet

4 4 7(a) Loan Production

5 7(a) Portfolio Comparison 5 The 7(a) active portfolio has been experiencing a trend of increasing dollars and decreasing loans since the expiration of the Jobs Act, which increased loan ceilings, at the beginning of FY 2011

6 6 504 Production FY 2012 increase was impacted by 504 Refinance Program which ended 9/27/2012.

7 504 Portfolio Comparison Active Portfolio has been experiencing a trend of increasing dollars and loans over the past 4 fiscal years. While this trend was showing prior to the Jobs Act, the increased loan limits at the beginning of FY 2011 have intensified this trend.

8 8 504 Program Job Creation

9 9 504 Public Policy Achievements

10 What's New?? SOP (f) Effective January 1, 2014 Streamlined small loan program underwriting Clarified collateral requirements 1919/1920 replaces former form 4/4-I for larger loans 504 forms also revised to align 504 and 7(a) Regulation to be published soon 10

11 7(a) PARRiS Review Protocol 11 P Performance - Calculated Risk Rating and cash flow A Asset Management - Quality of key lender origination, servicing and workout processes R Regulatory Compliance Reporting & SBA regulatory (CFR, SOP, etc.) compliance Ri Risk Management - Corporate governance, and internal controls S Special Items - Additional high risk lender behaviors identified by OCRM The PARRiS concept identifies five key components of lender risk to SA.

12 504 SMART Protocol 12 Solvency and Financial Condition S Management and Governance M S Asset Quality and Servicing A Technical Issues and Mission T Regulatory Compliance R

13 SBA One SBA One will lower improper payments and repairs/denials Performing eligibility screening upfront will deter ineligible loans from being approved. 13 SBA One will lower lender transaction costs Streamlining SBA process will reduce the cost of making a standard SBA loan by an estimated $6,806 and save 87.5 hours of processing time. SBA One will reduce paperwork Unifying 7(a) lending under one set of forms will simplify documentation for borrowers and lenders. SBA One will connect borrowers to SBA lenders Leveraging an improved data management system will expand access to capital through SBAs extensive lending network.

14 SBA Veterans Advantage Effective January 1, 2014 Express loan product Veterans, spouses and related individuals (see SOP) Zero fees on all loans $350,000 and less See SBA Notice

15 Community Advantage The Community Advantage Network has 79 mission-based lenders across the country providing 7(a) loans to underserved markets –CA Lenders have had success partnering with national and local banks for capitalization support and also deal referrals – doing loans the banks wont due, providing borrowers with necessary technical assistance, etc. –3 CA Lenders are in PA: The Progress Fund, Regional Development Funding Corporation, Washington County Council on Economic Development –3 Nationwide CA Lenders: Empire State CDC, CDC Small Business Finance, and Local Initiative Support Corporation –Program currently has $84 million in loan approvals since it was initially created in FY11 15

16 Community Advantage CDCs are an eligible organization which may be approved as a Community Advantage Lender –New Program Guide to be published shortly 7(a) loans of $150,000 or less are up in FY14 versus the same time period in FY13 –Up 7.6% in numbers of approvals and 11.3% in dollars approved 7(a) loans to minorities are also up in FY14 across all categories/ethnicities HQ Contact: Grady Hedgespeth, Director, Office of Economic Opportunity – –grady.hedgespeth.sba.gov 16

17 7(a) Program Contacts 7(a) Loan Program Branch Dianna Seaborn, Sloan Coleman, Financial Justine Alston, Financial Meghan Milloy, P(202) SBA Sacramento Loan Processing Center (SLPC) Frank Pucci, Center 17

18 504 Program Contacts 504 Loan Program Branch Linda Reilly, Chief Warren Boyd, Financial Bob Carpenter, Financial Eric Wall, Financial SBA Sacramento Loan Processing Center (SLPC) Richard Taylor, Center 18


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