Presentation on theme: "WPASGL Small Business Lending Conference Seven Springs Mountain Resort"— Presentation transcript:
1WPASGL Small Business Lending Conference Seven Springs Mountain Resort March 13, 2014SBA Office of Financial AssistanceLinda Rusche, Director
2SBA Loan ProgramsTools that enable lenders to meet the needs of their small entrepreneursPublic/private partnershipCreating jobsStimulating economic activity
37(a) & 504 Portfolio Overview 7(a) Balance Sheet504 Balance SheetGross Active Balance$59,303,856 Active Loans235,296Current Balance$55,663,081Past Due Balance$490,515Deferred Balance$122,484Delinquent Balance$769,284Liquidation Balance$2,258,491Non-Current Balance$3,640,775Active Purchases$6,164,557Total Exposure$65,468,414Note: dollars in thousandsData as of December 31, 2013Gross Active Balance$27,142,193 Active Loans60,927Current Balance$25,858,842Past Due Balance$101,105Deferred Balance$79,683Delinquent Balance$371,015In Catch-up Balance$731,546Non-Current Balance$1,283,351Active Purchases$1,566,930Total Exposure$28,709,123Note: dollars in thousandsData as of December 31, 2013
57(a) Portfolio Comparison 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
6504 ProductionSince Fiscal Year 2010, SBA loan volume and dollars has remained fairly consistent, with the exception of FY 2012, which included American Reinvestment and Recovery Act stimulus for the 504 Debt Refinancing program.In 2013 there were 7,708 loan approvals under the 504 loan program totaling more than $5.2 Billion.FY 2012 increase was impacted by 504 Refinance Program which ended 9/27/2012.
7504 Portfolio Comparison504 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.
8504 Program Job CreationThe primary goal of the 504 Loan program is local economic development and job creation/retention.It is estimated that since between FY 2010 and FY 2013 the 504 Program will create nearly 287,199 jobs and retain an additional 111,621 jobs that most likely would be lost if the financing were not provided. That is nearly 400,000 jobs created or saved in 4 years. That equates to slightly more than 12 jobs per loan, or 1 job created or retained for every 53,200 in debenture funds approved,
9504 Public Policy Achievements In FY 13, the data available reflects that of the 7,708 loans approved by SBA, 6,184 had met at least one of the public policy goals or community development goals set forth in 13 CFR § It is noted that this data is not presently required to be submitted for loan approval unless the loan does not meet the job creation requirement, or under the manufacturing or energy public policy goal.Community Development GoalsImproving, diversifying or stabilizing the economy of the locality: 1,263 loansPublic Policy GoalsBusiness District Revitalization: 370Expansion of Exports: 79Women-Owned: 986Veteran-Owned: 221Minority Business Development: 1,155Rural Development: 1,210Increasing Productivity and Competitiveness: 53Businesses restructuring from Federally mandated policies affecting the environment: 5Businesses affected by Federal Budget Cutbacks: 39Reduces Unemployment in Labor Surplus Area: 720Energy Public Policy goals: 83 (Reduce energy use by 10%: 44; Sustainable building designs: 11; Generate renewable fuels: 28)Total Loans reflecting a Public Policy or Community Development Goal: 6,184
10What's New?? SOP 50 10 5 (f) Effective January 1, 2014 Streamlined small loan program underwritingClarified collateral requirements1919/1920 replaces former form 4/4-I for larger loans504 forms also revised to align504 and 7(a) Regulation to be published soon
117(a) PARRiS Review Protocol The PARRiS concept identifies five key components of lender risk to SA.PPerformance - Calculated Risk Rating and cash flowAAsset Management - Quality of key lender origination, servicing and workout processesRRegulatory Compliance Reporting & SBA regulatory (CFR, SOP, etc.) complianceRiRisk Management- Corporate governance, and internal controlsSSpecial Items - Additional high risk lender behaviors identified by OCRM
12504 SMART Protocol S A R T S M Solvency and Financial Condition Management and GovernanceAAsset Quality and ServicingRRegulatory ComplianceTTechnical Issues and Mission
13SBA One 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 lower improper payments and repairs/denialsPerforming eligibility screening upfront will deter ineligible loans from being approved.SBA One will reduce paperworkUnifying 7(a) lending under one set of forms will simplify documentation for borrowers and lenders.SBA One will connect borrowers to SBA lendersLeveraging an improved data management system will expand access to capital through SBA’s extensive lending network.
14SBA Veterans Advantage Effective January 1, 2014Express loan productVeterans, spouses and related individuals (see SOP)Zero fees on all loans $350,000 and lessSee SBA Notice
15Community AdvantageThe Community Advantage Network has 79 mission-based lenders across the country providing 7(a) loans to underserved marketsCA Lenders have had success partnering with national and local banks for capitalization support and also deal referrals – doing loans the banks won’t 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 Development3 Nationwide CA Lenders: Empire State CDC, CDC Small Business Finance, and Local Initiative Support CorporationProgram currently has $84 million in loan approvals since it was initially created in FY11
16Community AdvantageCDCs are an eligible organization which may be approved as a Community Advantage LenderNew Program Guide to be published shortly7(a) loans of $150,000 or less are up in FY14 versus the same time period in FY13Up 7.6% in numbers of approvals and 11.3% in dollars approved7(a) loans to minorities are also up in FY14 across all categories/ethnicitiesHQ Contact: Grady Hedgespeth, Director, Office of Economic Opportunitygrady.hedgespeth.sba.gov
177(a) Program Contacts7(a) Loan Program Branch Dianna Seaborn, Chief Sloan Coleman, Financial Analyst Justine Alston, Financial Analyst Meghan Milloy, P(202) SBA Sacramento Loan Processing Center (SLPC) Frank Pucci, Center Director
18504 Program Contacts504 Loan Program Branch Linda Reilly, Chief Warren Boyd, Financial Analyst Bob Carpenter, Financial Analyst Eric Wall, Financial Analyst SBA Sacramento Loan Processing Center (SLPC) Richard Taylor, Center Director