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SBA Loan Agent/Broker Fraud: Let's Talk About It
"This subject has always been the elephant in the room from my perspective. I appreciate you bringing this to the forefront as it's a subject that could impact the livelihood of all who operate in the SBA industry if it continues to grow. Thanks for your leadership."
Michael Owen | Chief Operating Officer
CDC Small Business Finance Corp.

NAGGL'S LENDING TECHNICAL CONFERENCE. MAY 2-4: HYATT REGENCY, INDIANAPOLIS
As always, NAGGL is a key gathering place for lenders, lender service providers, congressional staffers and SBA leadership - and a great way to get the latest scoop on all things SBA. This year's conference has the inside track on what's coming down the pike at SBA ... from keynote speaker SBA Administrator Linda McMahon, to the new team at the Office of Capitol Access, to news from the Hill, to what to expect from SBA for the rest of 2017.

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SBA's NATIONAL SMALL BUSINESS WEEK. APRIL 30-MAY 6, 2017
SBA's National Small Business Week is a big deal. A really big deal for SBA and America's small businesses. SBA's 54th Small business week kicks off in Washington D.C. on April 30 and May 1, with award ceremonies honoring outstanding small business owners and entrepreneurs from across the country. After that, SBA Administrator Linda McMahon will attend Small Business Week events in New York City, Indianapolis, Dallas, and Fresno, California. There also will be recognition and educational events in SBA's 10 regions and 68 Districts all week.

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SERVICING SBA LOANS: PLAY IT SAFE. PLAY DOMINOS!
You know about playing dominos: Connect the dots and create a number trail that goes on and on. The Domino Effect. Just as with dominos, whenever there's a change in the status of an SBA loan, one service action doesn't stop there. It can - and usually does - trigger a range of necessary actions. And if they're not handled properly, you could see a serious impact on the guaranty.

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WE'RE GROWING!! LONGTIME SBA EXPERT RICHARD JEFFREY JOINS OUR JRB TEAM
We’re excited to announce a great addition to our team: JRB Associate Richard Jeffrey. Richard brings more than 30 years of SBA and business lending experience to JRB, and has held executive and senior management positions including executive vice president/chief credit officer, vice president/senior loan officer, and vice president/lending manager at several major financial institutions and CDCs. He is a past chair of The National Association of Certified Development Companies (NADCO).

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PROTECT YOUR GUARANTY: ENSURE PROOF OF INSURANCE IS SUFFICIENT, SUPPORTED - AND DOCUMENTED
The last thing you want is denial of a claim on an SBA loan. So what's the first thing you want? Proper documentation to support proof of insurance and the proper endorsements are among the first things to consider - and are an important layer of protection of your SBA Guaranty. Up front: Make sure all insurance requirements are in your Authorization and are properly documented. And it's just as important not to require coverage above and beyond what's called for. Yet some lenders do.

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SBA CONSTRUCTION LOANS: BUILDING YOUR PORTFOLIO STEP-BY-STEP
With residential and commercial construction picking up, contractors and construction companies are hungry for financing. So it's a good time to give a leg up to local construction companies and at the same time help build up your local economy - and your SBA portfolio.

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NEW YEAR, NEW SOP: OUR TAKE. SOP 50 10 5 (I) FRANCHISE & CREDIT ELSEWHERE CHANGES
The updated SOP streamlines eligibility procedures for SBA's eligibility review of franchise applicants, and clarifies the "affiliate" relationship between Franchisees and Franchisors. Most significant is the SBA's new Addendum to Franchise Agreement, Form 2462. How significant? Without it, there's no loan.

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NEW YEAR. NEW SOP: SIGNIFICANT CHANGES. SOP 50 10 5 (I): FORM 912 REVIEW PROCEDURES STREAMLINED
The updated SOP streamlines the procedures in SBA Form 912 Statement of Personal History. These changes simplify SBA's review of businesses where the principal/applicant gave "Yes" answers to questions 1, 2, & 3 on SBA Borrower Information Form 1919, which ask about the applicant's criminal background. So what's new? As an SBA lender, what are your responsibilities? Here's a recap:

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REMINDER: CLOCK TICKING ON SOP 50 57 2 REQUIREMENTS FOR LIQUIDATION AND SUBMISSION OF CHARGE-OFF TABS
It's more than a year already. The SBA's updated SOP 50 57 2 became effective December 1, 2015. With it came significant changes, clarifications and modifications to the agency's Servicing and Liquidation Policies and Wrap-up Procedures. In many cases, SBA tightened deadlines for 7(a) lenders to complete liquidations and submit Wrap-up Reports.

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OUR NAGGL CONFERENCE TAKE-AWAYS: WRAPPING UP SBA OVERSIGHT - HOT BUTTON ON THE HILL
As promised - and responding to requests from several lenders - here's more info about the increased D.C. oversight of SBA covered at last month's NAGGL Conference. Why the step-up? According to SBA's Office of Credit Risk Management (OCRM), 70,000 SBA loans totaling $29 billion were booked in FY 2016, with an estimated $3 billion dollar volume increase year-over-year. So thanks to the great job SBA lenders are doing, there's need for assurance that current oversight is commensurate with the rate of growth.

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NAGGL ANNUAL LENDERS CONFERENCE: OUR TAKE-AWAYS
NAGGL's Annual Lenders Conference has always been a forum for SBA lenders, lender service providers and SBA leadership to discuss key issues affecting the SBA lending community. Discussions at this year's Conference held October 31- November 2 in Scottsdale, Arizona focused on many substantive and important issues.

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CELEBRATE SMALL BUSINESS SATURDAY NOVEMBER 26th
Think Big. Shop Small.® Promoting Small Businesses Helps Your Business. Thanksgiving: a day we give thanks for our blessings and celebrate the one day we don't think about our diets. Well, not much. On Friday, we shop. Then there's Small Business Saturday®. Celebrated this year on Saturday, November 26th, Small Business Saturday helps kick off the holiday shopping blitz. Shopping small: What a great way to stimulate your local economy - and to walk off calories from Thanksgiving dinner!

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SBA ONE: SO HOW'S IT GOING?
First, an update: SBA One*- SBA's streamlined online portal for 7(a) loan processing - has been mandatory since October 1 for all loans processed as non-delegated loans. If you're a PLP lender, you must now submit all non-delegated packages through SBA One. For delegated applications, SBA recently announced that these apps can still be submitted through Etran.

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NAGGL'S ANNNUAL SMALL BUSINESS LENDING CONFERENCE
NAGGL's Annual Small Business Lending Conference has long served as a definitive gathering place for small business lenders, lender service providers and SBA leadership. This year's conference at Scottsdale's Fairmont Scottsdale Princess will be jam-packed with educational opportunities, breakout sessions on trends in small business lending and updates on legislative and regulatory issues.

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LOAN REVIEWS SPOTLIGHT SBA PROCESSES & PROCEDURES
As we've discussed in recent JRB eBulletins, loan reviews often reveal breakdowns in a lender's policies and procedures. In the ever-evolving world of SBA lending, it can happen. And it's a cascading effect. For instance, an updated SOP can trigger the need for a raft of changes in your policies and procedures.

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SBA LENDERS: NEW SBA 7 (a) & 504 FEES EFFECTIVE 10/1/16
Quick reminder: Concurrent with SBA's new fiscal year effective next month, SBA Information Notice 5000-1389 dated September 16, 2016, announces the 7(a) and 504 loan fee schedule for Fiscal Year 2017. For details, please read the entire Information Notice.

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TRAINING: ABCs OF SBA ARE THE FOUNDATION OF SUCCESS
At J.R. Bruno, lending department staff training has been a mainstay of our service to the SBA and business lending community since our beginnings 22 years ago. In fact, training has been such an integral part of our service that we haven't talked much about it. So fine. Let's talk about it.

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LOAN REVIEWS: A HOT TOPIC - HERE'S WHY!
In working with SBA and business lenders across the country, questions about the need for loan reviews have come up again and again. As a lender, you have reason to be concerned - and to consider annual portfolio reviews to make sure you're prepared for all contingencies. Here's a recap of the reasons for the increased focus on loan portfolios along with the answers to common questions we've come across:

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AMERICA EAST SBA LENDERS CONFERENCE. PHILADELPHIA MARRIOTT DOWNTOWN · AUGUST 24-26, 2016
The America East Conference is a great opportunity for SBA lenders to network with peers, meet SBA officials, take advantage of NAGGL training, and get the latest updates from industry experts. This year we're meeting in downtown Philly, with a conference schedule including more than 40 speakers and over a dozen breakout sessions on "hot button" SBA topics.

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J.R. BRUNO PROMOTES LORI MC CAUSLAND TO SENIOR ASSOCIATE. JRB + LORI + CLIENTS = A LOVE/LOVE RELATIONSHIP
We're proud to announce Lori McCausland's promotion to JRB Senior Associate! Lori has been an asset to our team since joining us as an associate four years ago. With more than 25 years of commercial lending experience, she came to JRB having held management positions at several national, regional and local banks. Much to her credit, Lori has handled the transition from long-time financial institution employee to entrepreneurial consultant with great success.

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GREAT BASIN FEDERAL CREDIT UNION: SMART OUTREACH ... GREAT MBL!
From time-to-time we come across a credit union with an MBL marketing strategy we believe is worth sharing. Want to increase business community goodwill and your SBA/MBL portfolio at little or no cost? Great Basin Federal Credit Union in Reno, Nevada is doing all that. Read on!

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SBA CLARIFIES AFFILIATIONS FOR SBA ELIGIBILITY ...IT'S ALL ABOUT CONTROL, CONTROL, CONTROL!
A new SBA Rule effective July 27 clarifies what constitutes "control" in determining small business and franchise affiliations for SBA loan program eligibility. In many ways, the new rule helps open the door to SBA lending for small business owners and franchisees.

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CU CONFERENCES: ANNUAL STRATEGIC LENDING CONFERENCE
NIAGARA FALLS, ONTARIO, CANADA· JULY 20-24

If you know J.R. Bruno & Associates, you know we're long-time advocates of credit union SBA lending. So we're delighted that CU Conferences invited us to give a presentation on "The Advantages of an SBA Lending Program" at its Annual Strategic Lending Conference, July 20-24.

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OIG AUDITS & FINDINGS: WHAT WE CAN LEARN
Office of the Inspector General
MISSION: To conduct independent audits, inspections, evaluations, and investigations to promote economy and efficiency and to prevent and detect waste, fraud, abuse, and mismanagement in the programs and operations of the Department and the Broadcasting Board of Governors.

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SBA'S UPDATED SOP 50 57 2: OUR PERSPECTIVE. ROUND 3 - 'IN EFFECT AT THE TIME THE LOAN WAS APPROVED'
The SBA's updated SOP 50 57 2, effective since December 1, 2015, has significant changes, clarifications and modifications to the agency's Servicing and Liquidation Policies and Procedures. In this third look at key changes to the SOP, we're highlighting an important clarifying phrase the SBA added to several sections which puts a more concrete requirement on certain lender actions

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JRB: CELEBRATING 22 YEARS! PROMISES KEPT. AND MILES TO GO!!
We're celebrating a significant milestone at JRB: 22 years of continued service to America's business lending community. That makes J.R. Bruno & Associates the longest-running consulting firm to SBA and business lenders in the country!

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SBA'S UPDATED SOP 50 57 2: OUR PERSPECTIVE. ROUND 2 - DEADLINES & REPORTING REQUIREMENTS
The SBA's updated SOP 50 57 2, effective since December 1, 2015, has significant changes, clarifications and modifications to the agency's Servicing and Liquidation Policies and Procedures. In many cases, SBA is tightening the strings around when 7(a) lenders must complete liquidation activities and submit their reports. Important stuff. Significant consequences. This is the second in our series reinforcing existing requirements and highlighting key changes from our perspective.

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GETTING THE 'RIGHT READ' ON A FRANCHISE BRAND. FRANdata's Tools for More Accurate Credit Risk Analysis
Good news for franchise lending. According to leading franchise analysis and advisory firm FRANdata, franchise lending is growing and is trending upward. We're longtime supporters of franchise lending. Here's why: With franchise lending you can grow your portfolio, help people run their own business, and stimulate the economy - all with the mitigated risk franchise loans offer. As a lender, how can you get an accurate "read" on franchise risk potential? We spoke with FRANdata President Edith Wiseman who walked us through the challenges, data and available resources.

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SUPPORTING SBA IN MAY: NATIONAL SMALL BUSINESS WEEK MAY 1-7... NAGGL LENDERS TECHNICAL CONFERENCE MAY 2-4
SBA's Small Business Week: Dream Big. Start Small. That's what SBA is talking about! National Business week kicks off May 1 & 2 with award ceremonies in Washington, D.C. where SBA Administrator Maria Contreras-Sweet will honor outstanding business owners from across the country. Then, she'll headline special events in Atlanta, Denver, and Phoenix - wrapping up the week at California events in San Jose, and Oakland. There also will be events throughout SBA's 10 Regions and 68 Districts all week. For updates and activities in your area, check out www.sba.gov/NSBW.

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HEADS UP: NCUA'S MBL FINAL RULE PHASE 1 -
PERSONAL GUARANTEE REQUIREMENT GOES AWAY APRIL 29!

Credit Union Business Lenders: Your MBL door is opening wider. When the NCUA Board unanimously approved its MBL Final Rule back in February, outgoing Chairman Debbie Matz called it a "new era" for NCUA as a regulator and for credit unions as business lenders. The rule hadn't been updated significantly since 2003. It was time.

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HEADS UP SBA LENDERS: SBA ONE WILL BE MANDATORY!!
SBA's Big News: Use of SBA One - SBA's soup-to-nuts online portal for 7(a) loan processing - will become mandatory for all General Partner (GP) loan submissions to the Loan Guaranty Center by Delegated Lenders on July 31st for non-delegated loans, and for Non-Delegated Lenders on September 30th. Here's more info the SBA wants you to know as of the agency's communication issued on March 21, 2016:

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SBA'S SMALL BIZ POOL JUST GOT BIGGER!
'Small Business' Definition Expansion Opens Window to More SBA Loans

The window of opportunity for SBA loans just opened wider with SBA's recent changes to the employee-based size standards for several industry categories. As announced in news releases posted on January 27 and 28, 2016, SBA has revised the size standards for certain sectors of the Manufacturing, Wholesale Trade and Retail Trade, and other industry sectors. These changes took effect just weeks ago - on February 26, 2016.

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NEW: SBA ONE ENHANCEMENTS!!
Streamlined Enrollment & Key Updates Make Things Easier - Better Read Up!!

Just in! SBA One* - SBA's soup-to-nuts online portal for 7(a) loan processing - just got better with enhancements effective Monday, February 29th. Since launching a year ago, SBA has solicited lender feed-back on making SBA One even better. SBA listened. The latest enhancements include a new, streamlined enrollment process and updates throughout.

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SBA'S UPDATED SOP 50 57 2: 7(a) LOAN SERVICING AND LIQUIDATIONS ... COMMENTS FROM OUR PERSPECTIVE
The Small Business Administration's updated SOP 50 57 2, effective since December 2015, has many significant changes, clarifications and modifications to SBA's Servicing and Liquidation Policies and Procedures. From time-to-time, we'll highlight and comment on specific sections from our perspectives as consultants. Two definitions in the SOP - Prudent Lending, and Prudent Servicing - set the tone for the document.

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DENYING SBA & BIZ LOAN APPLICATIONS ...
TIMELY RESPONSE IS KEY: HAVE YOUR COMMUNICATIONS READY!

In working with credit union clients that are new to business lending, we've advised several that in addition to consumer protection, Regulation B also applies to business loans. The NCUA's Office of Consumer Protection Fair Lending Guide spells it out:

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REFINANCING SBA LOANS CHAPTER 2: REFINANCING SELLER DEBT
Here's the second in our series on refinancing SBA loans. We're looking at what needs to happen when the seller carries back a portion of the financing as part of a change of ownership - what's commonly referred to as "Seller Debt" - or debt owed to the seller.

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REFINANCING SBA LOANS CHAPTER 1: REFINANCING DEBT AS RELATED TO SBA'S 'CREDIT ELSEWHERE TEST'
As promised, we're taking a look at the thorny issue of refinancing SBA loans. First up: Refinancing existing debt as related to the "Credit Elsewhere Test." In a previous eBulletin, we discussed that the language defining Credit Elsewhere calls for clarification:

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HEADS UP SBA LENDERS: SOP 50 57 VERSION 2 -
Servicing & Liquidations - Effective December 1, 2015

SBA has issued SOP 50 57 2 - Servicing & Liquidations containing key changes to 7(a) loan servicing and liquidation policy and procedures. This latest version of the SOP becomes effective on Tuesday, December 1, 2015. Key changes to SOP 50 57 2 are summarized in SBA Information Notice 5000-1358 dated November 24, 2015. They include:

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Celebrate Small Business Saturday, November 28th. 'Talk Turkey' to Your Local Small Businesses!
Thanksgiving: a day we give thanks for our blessings and celebrate the one day we don't think about our diets. Well, not much. On Friday, we shop. Then there's Small Business Saturday. Celebrated this year on Saturday, November 28th, Small Business Saturday encourages people to "Think outside the big box stores" - and Shop Small.®. Small Business Saturday became "official" with recognition by the U.S. Senate in 2011. On its website, the SBA encourages everyone to join with the agency and organizations across the country in supporting local small businesses.

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SBA 7 (a) LENDERS: WE'LL ALWAYS HAVE PARRiS!
... Coming Soon to the SBA Lender Information Portal

For nearly a decade, SBA's Lender Information Portal has been the primary channel for the Office of Credit Risk Management (OCRM) to share portfolio performance with 7(a) lenders - and a great tool for lenders to proactively monitor their performance and manage their portfolios. All information is confidential and unique to the institution. Over the years, the SBA has continually upgraded the Portal, enhancing technology and adding new metrics.

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SBA 7 (a) FEE REDUCTIONS = GREAT OPPORTUNITIES FOR LENDERS & BORROWERS!!
As announced in SBA's Information Notice 5000-1352 dated September 28, 2015, the agency continues to support lenders and borrowers with reduced fees for Fiscal Year 2016. Effective for all 7(a) loans approved October 1, 2015 thru September 30, 2016, schedules for the annual service fee - the ongoing guaranty fee - and the upfront guaranty fee for all 7(a) loans are reduced:

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SBA LENDERS: INTERNATIONAL LOANS - WHY THEY'RE A GREAT DEAL !!
International SBA Loans are a great way you can help small business borrowers expand their export sales, grow your SBA loan portfolio - and increase your bottom line. In short, if you're not doing them, you're missing a great opportunity!

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SBA ONE: COMING SOON TO A REGION NEAR YOU... OR TO YOUR REGION!!
It's here! SBA One - SBA's one-stop online processing platform - has launched. After more than a year of R&D and much testing and tweaking, SBA One is underway for Region III SBA 7(a) lenders. So lenders in Pennsylvania, Delaware, Maryland, West Virginia and Washington, D.C. have first crack at the system that will roll out in waves over the next weeks and months.

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SETTING UP A NEW SBA DEPARTMENT? CONSIDER ALL YOUR OPTIONS!
As consultants, we often receive calls from lenders looking to set up SBA departments. In many cases, the caller has been charged by executive management to establish an SBA department ASAP. Everyone familiar with us knows that we have long touted the advantages of SBA lending. As a lender, the SBA-backed guaranty mitigates your risk and increases your opportunities to realize solid income. And importantly, offering SBA products makes your bank more diverse and opens new opportunities you might not have had.

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FOLLOWING UP: HERE'S THE IRS SIGNATURE TITLES LIST!!
Thank you for contacting us regarding our Form 4506-T eAlert. In response to several requests for the list of signature titles the IRS requires, click here for the title list for your convenience.

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COMPLETING FORM 4506-T: GETTING IT RIGHT
WHAT'S HOLDING UP THE SHOW?

SBA has issued Important Update: IRS 4506-T a guide to SBA lenders in processing tax return transcripts they get from the IRS. The message: SBA lenders, make sure your borrowers fill out the form correctly so the IRS can send the transcripts to SBA for you to verify. Sounds simple. Yet processing has been slow going.

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SBA IS 'SPRING CLEANING' - OCRM TAKES LENDER REVIEW PROCESS ONLINE
Over the past weeks, some clients have told us they've received a PARRiS Analytical Review (PAR) Notification Letter from the OCRM alerting them to a Risk-Based PAR Analytic Review of their institution. As recently as last year this type of letter was issued because the SBA had noted red flags in the loan portfolio and was informing an institution of a dreaded upcoming on-site review. In response, there might be a flurry of in-house activity in anticipation of OCRM staff descending on the lender.

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'ARE YOU ON MATCH?' SBA'S LINC PUTS LENDING PARTNERS TOGETHER NATIONWIDE
SBA's new online matchmaking tool connecting small business owners with SBA lenders has rolled out across the country. At this month's NAGGL Conference in San Antonio, I heard keynote speaker SBA Administrator Maria Contreras-Sweet announce the major expansion of Leveraging Information and Networks to Access Capital (LINC). The announcement was an opportunity to spread the word during the administrator's nationwide tour for National Small Business Week.

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HEADS UP, SBA LENDERS: SOP 50 10 5 H JUST RELEASED!!
SBA has released SOP 50 10 5 H, Lender & Development Company Loan Programs, which is effective as of May 4, 2015. This latest update applies to all loan applications SBA receives on or after the effective date.

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UCC FILINGS: IT'S LOCATION. LOCATION. LOCATION.
"Location, location, location." There's a reason we say it three times. Location is important. We all know that choosing the wrong location can mean profit or loss, whether buying a home or establishing a business. The same goes for your institution when securing commercial UCC-1 liens. Filing UCC-1 Financial Statements in the wrong locations can come back to haunt you - and cost you.

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SBA'S SMALL BUSINESS WEEK - IT'S NEXT WEEK!
PUBLIC EVENTS, WEBINARS, SOCIAL MEDIA... AND MORE!!

SBA is celebrating National Small Business Week for the 52nd year. Each year since 1963, the president of the United States has proclaimed this week to honor America's small businesses, owners and entrepreneurs. We got the memo. More than half of working Americans either own or work at a small business, and small businesses create two-out-of three net, new jobs each year.

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COMING TOGETHER FOR CREDIT UNION SBA LENDING
IN THE CU NEWS: SBA, NCUA, NAFCU, CUNA ALL ON!

As a longtime advocate of credit union SBA lending - for the benefit of your local economies and your own bottom lines - I'm gratified by the spate of agreements over the past weeks and months between SBA, NCUA and the various credit union trade organizations. The upshot: They're unified in their efforts to expand your programs or get you on board!

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FORM 1149: It's Optional But Chances Are... You Need To Keep Using It!
If you subscribe to SBA's Information Notice service, you should have already received SBA Information Notice 5000-1338 effective March 23, 2015. This Notice lets SBA lenders know that the OMB has given lenders the green light to continue using SBA Form 1149 Lender's Transcript of Account - which has been updated with revised instructions. While the older versions still are on the SBA website, they're obsolete. This latest edition has a January 31, 2018 expiration date.

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Site Visits Play Multifaceted Roles
As part of our comprehensive training to new SBA and business lenders, we discuss the many roles site visits play in the process. While the SBA requires Post Closing site visits only when a loan is in default, as a "Best Practice," we recommend that lenders do them annually, even for loans in good standing.

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What's An SBA LSP Agreement?
Before we get to the Agreement, let's define "Lender Service Provider." As detailed in SOP 50 10 5(G), Lender Service Providers fall under the category of "Agent." Specifically, "... a 'Lender Service Provider' means an Agent who carries out lender functions in originating, disbursing, servicing, or liquidating a specific SBA business loan or loan portfolio for compensation from the lender."

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Choosing A Loan Review Provider: Doing Due Diligence
In working with clients and in our eBulletins we have continually underscored that it doesn't work to simply close loans and put them on the back burner. Ongoing loan servicing and portfolio management are critical to a successful SBA and business loan program. If your bank decides to outsource to a loan review provider - or for that matter any external resource - the selection process is equally critical.

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Heads Up SBA 7(a) Lenders: You Gotta Take The ETran!
The Matrix Version 10 Puts Some Unilateral Actions On The SBA Express

"Take the 'A' Train." Way back when, jazz great Duke Ellington gave directions to his composer/arranger that the new "A" subway was the fastest way to get from Brooklyn to his house in Harlem. The result was a jazz classic. As an SBA lender, the E-Tran has been the fastest way to get information to the Agency for some time. Now, expanded use of E-Tran puts certain unilateral servicing and liquidation actions on SBA's electronic expressway.

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Franchise Lending Is Growing.... In 2015: It's Time to Jump In!
It's been a while since we've updated you about the franchise lending world. And the news is good. According to leading franchise analysis and advisory firm FRANdata, franchise lending has been growing steadily and is trending upward for future growth. We're longtime supporters of franchise lending and with good reason: Franchise lending gives you an opportunity to grow your loan portfolio, help people run their own business, and stimulate the economy - all with the mitigated risk franchise loans offer.

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Credit Reporting Requirements for SBA Loans
We're Following Up: Closing The 'Black Hole'

In a November eBulletin we alerted you about the long-standing federal requirement for quarterly reporting of business credit histories to credit reporting agencies for all SBA-guaranteed loans. We noted that Debbie Golbach, Vice President, Business Development for Business Credit Reports, estimates that more than 80% of SBA lenders aren't fulfilling the requirement.

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Perspective on Business Financial Statements
In 2014, in its ongoing initiative to streamline processing, the SBA extended the time a business applicant's financial statement is valid for SBA loan submission. Under the new SOPs 50 10 5 (F) and 50 10 5 (G), an applicant's business financial statement must be current within 180 days of application, vs. the prior 120 days.

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Credit Reporting for SBA Loans - What's the Buzz?
In working with SBA lenders across the country, we're tuned into the current buzz in the SBA lending community. All the buzz: Lenders are talking about the SBA requirement for quarterly reporting of business credit history to business reporting agencies. Let's get it straight: It's a requirement. If you're an SBA lender you must do it. Is this something new? And why all the buzz?

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SBA Charge-Off Tabs = Wrap-Up Report For Timely 7(a) Loan Charge-Off Requests
A loan has tanked. You've slogged through servicing and liquidation and now it's clear that the loan has sunk. You're ready to ask the SBA to reclassify the loan to charge-off status. Submitting a request for charge-off is the last thing you want to do for everybody concerned. And to boot, in the past, you would've had to compile a comprehensive Wrap-up Report for submission to the SBA, yet another arduous process.

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Servicing and Liquidation Unilateral Authority: Going a Step Beyond
As a lender, handling a loan in servicing or liquidation is one of the last things you want to do. Yet what you thought was a good deal has gone sour. It happens. In its ongoing initiative to make this process easier for lenders, the SBA provides the Servicing & Liquidation Actions 7(a) Lender Matrix as a guide for actions needing SBA approval and those you can take under Unilateral Authority. Importantly, you need document, document, document.

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Dealing With The Big Bounce: When SBA 7(a) Payments Come Back NSF: How To Process?
It's The Big Bounce. A loan payment comes back to your credit union with the dreaded Notice: Non-Sufficient Funds. And you've already entered it into your system as paid. What actions do you take? A bounced 7(a) loan payment triggers several critical actions depending on when the payment was returned NSF and whether the loan was sold on the secondary market. You need to get the rebound and handle things right to keep your Form 1502 Reports accurate and ensure the integrity of your SBA portfolio.

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You've Inherited An SBA Portfolio With Special Asset Loans. What Do You Do? Where Do You Begin?
Special Asset Loan: It sounds like a good thing, but it's not. As a business lender, you know that "Special Asset" is the term given a loan that is no longer performing and requires special attention. And your financial institution has just inherited an SBA portfolio with a bunch of them. What to do now?

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Book Value is Zero. Are You Done?
When a loan is in liquidation, many lenders don't anticipate getting a recovery. After the SBA has paid the guaranty, the lender issues a Charge Off Tabs to the SBA, writes off their 25% share of the liability, and sends the file to storage. So the book value is zero. Are they done?

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SBA Revises SOP 50 10 5 (F) - Streamlines Processes, Loosens Reins on 7(a) Loans $350,000 Or Less
The buzz has been around for days. Now the SBA's official word is out. In its ongoing initiative to stimulate lending for SBA Small Loans the Agency has issued Procedural Notice 5000-1314, Loan Program Credit Scores, dated June 12, 2014. Effective July 1, 2014, the SBA has updated SOP, 50 10 5 (F). The updated SOP streamlines processes and procedures applicable to credit standards in an effort to put more funds into the hands of business owners.

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SBA Loan Repairs & Denials: Cross Your T's, Dot Your I's - The Fundamentals
For business lenders, one of the great advantages of making SBA loans is the risk mitigation ensured by the Guaranty. "Protect your Guaranty" is the mantra of SBA lenders - or it should be! As consultants, we continually stress the importance of strict adherence to SBA guidelines - accurate documentation and ongoing monitoring before and after an SBA loan is funded.

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We're Hittin' The Road! JRB's Rebecca Mendoza: Panelist SAMA Conference
We're excited that JRB Associate Rebecca Mendoza will be a guest panelist at the 2014 5th Annual Special Assets Management Association (SAMA) Conference next week. The panel of three will discuss the pitfalls of SBA lending. This organization is made up of financial institution chief credit officers and senior credit officers who actively manage special assets - loans no longer performing that require special handling. Rebecca is our resident expert.

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SBA's National Small Business Week
This month - and for the 51st year - the SBA will celebrate National Small Business Week. Each year since 1963, the president of the United States has proclaimed this week to honor small business owners and entrepreneurs. We got the memo: With half of working Americans either owning or working for a small business, and with small businesses creating two-out-of-three jobs annually - small businesses make our economy tick.

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SBA Eliminates Personal Resources Test for 7(a) and 504 Loans, Addresses CDC Operations Requirements
As part of its ongoing efforts to make the SBA lending process easier for borrowers, and to encourage job growth, the SBA has issued changes to the 7(a) and 504 loan programs. SBA posted its Final Rule on Personal Resources, Affiliation and CDC Operations on Friday, March 21, 2014. Most of the rule covers CDC operations requirements. The rule is effective April 21, 2014, except for the amendment to 13 CFR 120.823, which is effective April 21, 2015.

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Where Does the Money Go? Recoveries that Require Special Handling
From time to time we come across liquidation recovery issues we call "stragglers" - instances where lenders receive checks in the mail having to do with loans that were closed up to a year and a half before. Now, here's the money. Where to apply it?

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Loss Payee vs. Lender's Loss Payable Endorsement: Door #1 or Door #2?
As a business lender, your borrower must provide proof of insurance as a condition of your financial institution granting the loan. Now let's dig deeper. You want to make sure your institution is covered for losses to equipment, machinery and inventory. Two provisions in the borrower's Personal Property Hazard Insurance policy can cover these eventualities: Loss Payee and the Lender's Loss Payment Endorsement. For either one, the insurance policy must be properly endorsed and your financial institution properly listed on the policy as the Loss Payee or Lender's Loss Payee. These are extra items to review, but important ones.

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JRB’s Lori McCausland: Strives for Perfection!
From time-to-time, I like to give you a closer look at members of our JRB Team. When we founded J.R Bruno & Associates in 1994, we made it our mission to provide our clients with an experienced, dedicated team of SBA and business lending professionals. I've worked with some members of the JRB Team for a cumulative 50 years. And over time, we've added to the team.

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SBA's New 10-Tab Submission Tool & Streamlined 7(a) LGPC Submission Process
Now, the SBA has made it easier for lenders to submit 7(a) Loan Guaranty Packages electronically to the SBA's Loan Guaranty Processing Center using the newly revised 10-Tab Submission Tool. With a goal of reducing processing times, the SBA has streamlined the process for electronic submission and has "cut the fat" from the required paperwork in the 10-Tab format.

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JRB: Celebrating 20 Years!
I hope you and yours enjoyed a happy and healthy holiday season. As we round the corner into 2014, I'm looking ahead a couple of months - to March of this year when we celebrate 20 years of continued service to the business lending community. That makes J.R. Bruno & Associates the longest-running consulting firm to SBA and business lenders in the country!

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Great News for SBA Veterans Advantage Biz Owners!
The SBA's Procedural Notice 5000-1299 dated December 18, 2013 brings good news for Veterans Advantage small business owners. Beginning January 1, 2014 and continuing thru September 30, 2014, the upfront guaranty fee for Veterans Advantage Express Loans over $150,000 will be ZERO. Currently, there is no upfront fee for all 7 (a) loans less than $150,000, and a 3% fee for loans $150,001 to $350,000. The ZERO fee is for veteran-owned small businesses only.

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Calculating Global Cash Flow And Debt Service Coverage
For The SBA And Business Loan Credit Memo

The NCUA is now underscoring that calculating global cash flow and global debt coverage is part of prudent underwriting and risk assessment that institutions should practice for SBA and member business loans. For SBA's Small Lender Advantage program it's required.

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SBA'S SOP 50 10 5 (F) Collateral Policies ...
Comments From Our Perspective

The Small Business Administration has issued SOP 50 10 5 (F) Lender and Development Loan Company Programs. SOP 50 10 5 (F) becomes effective on January 1, 2014, and will apply to all applications received by SBA from that date going forward. Because the updated SOP has many significant changes and modifications, SBA encourages lenders to review it thoroughly before the effective date.

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The Art Of Handling SBA Offers Of Compromise
In this still volatile economy, the upturns have come too late for many small businesses. Unfortunately, some of our clients have seen this issue popping up: borrowers they've worked with for years stretched to the limit and hard-put to meet their SBA loan obligation. A possible solution: the Offer of Compromise. In some circumstances, a lender can release a borrower from their obligation when the borrower offers a form of reasonable consideration.

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Making Franchise Lending Easier -
For Starters: Let's Have FRUNS!

Here's an update on a new numbering system franchise information provider FRANdata has provided the SBA to more accurately identify franchise concepts. If you're considering franchise lending - and I encourage you to do so - read on!

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Tickler Reports: Don't Let Them Get Away From You
The good news: Things are picking up and your financial institution is booking new SBA and business loans. Yet as you know, booking the loans is just the beginning. Maintaining the portfolio is critical. You book each loan's key milestones into your tickler system so Tickler Reports can help you monitor items including financials and other loan covenants, receipt of recorded documents, and updated 3rd party reports such as title policy, appraisals, environmental reports, and UCCs.

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SBA Working Capital: Lifelines for Small Businesses
In this still up and down economy, business is picking up but things are still tight for the small business community. We're seeing many businesses operating on a short string, just able to pay overhead, keep their SBA loans current - and keep the business afloat.

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SBA & MBL Portfolio Reviews: Too Hot to Put on the Back Burner
Preparing for an NCUA examination or SBA review should begin long before the scheduled dates. By now your credit union should have the necessary financial information in your MBL and SBA loan files. Updates include personal and business tax returns, rents rolls, collateral evaluations, and insurance.

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Annual Loan Reviews: Too Hot to Put on the Back Burner
It's that time of year: About now your bank should be setting aside time for your scheduled internal annual reviews. Your board of directors and executive management team need to know the quality of the bank's loan portfolio in preparation for yearend reporting.

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Considering MBL and SBA Lending? Now's the Time to Plan - and Get in the Game!
It's that time of year. Strategic Planning Sessions for many credit unions. If your credit union isn't heavily into planning your corporate objectives and strategic goals for next year and beyond, you will be soon. Among the key topics: evaluating the products and services you plan to introduce or expand.

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Word to the Wise: Banks Buying Banks with SBA Portfolios - Better Check Out the Closets!
Lately, we're seeing an issue arising from the recent spate of banks acquiring other banks, in their own states or across the country. When banks buy banks with SBA portfolios, they often don't review those portfolios. At their peril.

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JRB's eBulletins Featured in CUES Business Lending Edge Online Newsletter
We're pleased that CUES Business Lending Edge online newsletter continues to feature our eBulletins! CUES Business Lending Edge goes out quarterly to credit unions across the country, and covers the latest business services news. Our eBulletin, "Servicing SBA Loans: You Gotta Play Dominoes!" is in the summer issue that came out this month.

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Starting an SBA Program: Getting Off The Ground... Much Easier Than You Think!
As we've crisscrossed the country, we've talked to many credit unions expressing a need to learn more about SBA lending and the advantages to credit unions and their members. If your credit union is just getting started with member business lending, the SBA model is a great way to begin. .

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Stuck in Form 1502 Quicksand? JRB'S Lori McCausland is Your '1502 Fixer!’
We continue to see our SBA lender clients getting stuck in the quagmire of Form 1502 Reporting. For SBA lenders, Form 1502 Reporting is one of the most important things you do. And Form 1502 is tremendously complicated. Even small errors can result in an SBA decline - and a "do-over." In worst case scenarios, committing serious transgressions could lose your PLP status, affect your application for PLP, or incur stiff penalties.

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JRB'S Vern Hansen: Leaves No Stone Unturned!
From time-to-time, I like to give you a closer look at members of our JRB Team. When I say "JRB Team" I mean it in every sense of the word. I'm fortunate to work with a close-knit team of experienced, dedicated SBA and business lending professionals who provide their expertise along with personal, hands-on guidance to meet our clients' specific needs. At J.R. Bruno, we've been at it since 1994, celebrating our 19th anniversary in March. Altogether, I've worked with members of the JRB Team for a cumulative 50 years.

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Servicing SBA Loans: You Gotta Play Dominoes
You know about playing dominoes: Stack 'em vertically close together. Knock one over. Then they all fall into place: The Domino Effect. Just as with dominoes, one service action in a commercial loan doesn't really equal a single action. It can - and usually does - trigger a whole spectrum of necessary actions.

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When Evaluating Risk: Look Beyond the Borrower
So you've got a business lending prospect with solid financials and no problems with collateral. A slam-dunk? Maybe. Given what's still going on with the economy, it's a good idea to take things further, to look beyond the borrower and evaluate the total picture.

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JRB's Business Valuation Webinar: Key Training On SBA Requirements & Procedures
We're often asked to educate lenders about key components of SBA lending, so we welcomed the invitation from the San Antonio District Office to lead a Business Valuations Webinar. Business valuations are often required by the SBA when there's a change of ownership of a business or when debt originally used to finance a change of ownership is being refinanced by SBA guaranteed financing. The SBA regards them as critical in helping buyers know what they're buying and determining that the seller's asking price is supported by historic operations.

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The SBA's SOP 50 57: So What's New?
Effective March 1, 2013, the SBA's SOP 50 57 combines and updates the SBA's policies and procedures on 7(a) Loan Servicing & Liquidation, replacing SOP 50 50/Servicing and 50 51/Liquidations. From our perspective the consolidation makes sense, since loans move from "regular servicing" status to "liquidation" status when they're in default and classified in liquidation according to the SOP.

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Lending to Businesses in a "No Equity" Market: Look to the Business
Time was, lenders automatically looked to the equity in a borrower's house or the business as sure collateral in underwriting a business loan. Times sure have changed. Now, chances are you're seeing minimal equity in the home or business. One or both might even be upside down. When there's little or no equity in the business or personal residence, lenders are increasingly turning to SBA lending to mitigate the loss of collateral.

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Choosing Business Lending Software: Compatibility On All Fronts Is King
Accurately processing your business loans from origination to closing, tracking your loan and payment activity and filing documents and reports are critical to running a successful SBA and business lending department. Not to mention the importance of integrating your business loan activity with your other operations and core systems.

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Selling SBA Loans on the Secondary Market: Here's Some Guidance
We continue to see lender confusion about selling premium and servicing fee options when selling the SBA-guaranteed portion of commercial loans on the secondary market.

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SBA Form 1502 Reporting: Getting it Right the First Time - 'The Devil's in the Detail'
Form 1502 Reporting is by and large the most important thing you do in SBA servicing outside of liquidations. A strong statement, but oh so true.

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Stepping Up Business Lending: Women and Veterans = Two Prime SBA Prospects
With the increasing number of women looking to grow or establish businesses, and with more 200,000 people discharged from the U.S. Military each year, your financial institution has a great opportunity to increase your SBA loan portfolio - and give a jolt to your local economy.

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Some Guidance From The SBA: When And How Should Lenders Protect Collateral?
In our still tough economic environment, we know many lenders are struggling with issues regarding protecting collateral in a variety of situations. Since the SBA has no hard-and-fast written rules for these situations, many of you are asking what the SBA's expectations are. We took your concerns, and some sample scenarios, to the SBA's National Guaranty Purchase Center in Herndon.

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JRB's Rebecca Mendoza: The Total Package
From time-to-time, I like to give you a closer look at members of our JRB Team. Yes, we're truly a team. I'm fortunate to have an experienced, dedicated team of SBA and business lending professionals working with me to serve your SBA and business lending needs, day in, day out. At J.R. Bruno, we've been at it since 1994, celebrating our 18th anniversary this past March. And altogether, I've worked with members of the JRB team for a cumulative 50 years.

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SBA Loan Business Valuations
Business Valuations: You gotta have 'em when there's a change of ownership in businesses secured by SBA loans. Because business valuations analyze overall operations, as differentiated from tangible assets such as real estate, property and equipment, the SBA regards them as key components in helping buyers know what they're buying and determining that the seller's asking price is supported by historic operations.

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Making More and Better Franchise Loans
This is the second in our series on franchise lending. As we've communicated, franchise lending is a great way to increase your SBA loan portfolio. FRANdata Vice President of Client Solutions Edith Wiseman recently walked us through new tools on the just-launched enhanced Franchise Registry website.

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The SBA's Office of Credit Risk Management: Moving into the Next Generation
With an objective to create an overall culture of credit risk awareness, new OCRM Director Brent Ciurlino joined the office in January. He brings more than 25 years of executive banking and lending experience and comes to the SBA from the FDIC. Under his leadership, the OCRM is developing methods to best manage program credit risk and monitor lender performance for the mutual benefit of lenders and the SBA. Here's a brief overview of the OCRM and a snapshot of Ciurlino's strategies for the office's "Next Generation."

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Franchise Lending is Easier Than You Think!
As an SBA Lender Service Provider, we believe it's incumbent on us to provide you with accurate, up to date information on issues affecting the business lending community. This is the first in a series on franchise lending that makes it easier to increase your loan portfolio with franchise loans.

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Now, More Lenders and Small Businesses Can Take Advantage of the SBA's Small Loan Advantage Program
If there ever was a time to offer SBA loans to your community's small businesses, this is it! Effective June 1, the new SOP 50 10 (E) incorporates key expansions to the SBA's SLA program - originally only available to PLP lenders. Now, all SBA lenders can take advantage of this program. What great opportunity for your bank to reach out to local small business owners - and to expand your SBA loan portfolio. Going forward, the new version of the SOP will apply to all SLA applications.

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Valued Employees: Are You Loving Them Yet Letting Them Leave? What's the Cost of Training vs. Turnover?
As an employer, you know that attracting and retaining qualified employees is key to running a successful operation. So you believe you have the right people on the bus. And in the right seats. Yet you have employee turnover.

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Underwriting SBA Loans: Consider All Available Collateral
While a borrower's cash flow is the primary basis for the SBA approving a loan, the SBA requires lenders to document all available collateral up to the full value of the loan to fully secure the loan. Documenting all business and personal collateral are key elements in establishing credit worthiness on the credit memorandum - and critical if the loan defaults and goes into liquidation.

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Celebrate Small Business Week - Reach Out To Local Small Businesses & Veterans!
National Small Business Week honors the more than 28 million small businesses nationwide, providing onsite and online interactive tools and information to help build their businesses and contribute to the long-term health of the economy.

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SBA Loan Covenants: Walking the Fine Line
Talk about walking a fine line. Including loan covenants in SBA loan credit memos can help ensure the health of your portfolio in a tough economic environment.

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Key to Successful MBL: Underwriting the Credit Memorandum
With credit unions front and center in the news, and with new members still streaming in, the time is right to ensure they stay. Right for Member Business Lending.

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Tax Season: Time for SBA Borrower Check-ups
Tax Day, April 17, has come and gone. Now SBA-required annual tax returns must be submitted by the borrower.

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Expanding Your Centers of Influence - Accountants, Lawyers = Great Biz Development Opportunities
It's a given that you'll prospect existing accounts for local business owners. You might already "flag" accounts so you can spot business deposits on personal accounts.

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Franchise Registry Expansions Ease 'Bumps in the Road' To SBA Franchise Lending
Franchise lending gives you an opportunity to increase your loan portfolio - and help people run their own businesses, create jobs, and stimulate the economy.

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There's No Such Thing as a 'Dumb' Question
In the course of our business, our JRB consulting team often runs into "dumb question'' scenarios. Sometimes asking that one question will save the loan, or not asking a question considered so elemental that it's beneath asking could lead to a negative result.

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J.R. Bruno: Consultants to the Business Lending Community
Let us put our 200 years of commercial lending experience to work for you! As the nation's leading consultants to the business lending community, J.R. Bruno & Associates has assisted hundreds of lenders in creating and maintaining profitable SBA and business lending programs. We've been at it for some time now. I founded J.R. Bruno & Associates in 1994, with an eye to providing financial institutions and their communities with ways they can work together for small business growth.

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At Your Service: Brad Crosley, Senior Associate
Like many of us at this time, I'm taking stock of this past year, of successes, challenges, gains and losses. If you've been getting our eBulletins for awhile, you know I consistently refer to our JRB Team, the dedicated professionals, who along with me, serve your SBA and business lending needs day in and day out. At J.R. Bruno & Associates, we're committed providing personal, hand-on guidance to meet your organization's specific needs.

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SBA Loan Agent/Broker Fraud: What Does It Look Like?
Criminal agent/broker fraud and ethical violations can occur in a variety of situations - and they all can put your SBA portfolio at risk. The SBA Office of the Inspector General is taking a hard look at the increasing incidence of agent/broker and borrower fraud. While the OIG's Auditing Division examines SBA programs for waste, fraud and abuse, the Investigations Division investigates cases of suspected fraud. The OIG may then refer cases of fraud to the U.S. Department of Justice for criminal or civil prosecution.

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The Members Are Coming. Make the Most of It. Make SBA Loans.
In the wake of some mega banks proposing debit fee charges and/or increasing fees for other products and services - and Bank of America's last ditch pull-out just before Bank Transfer Day - credit unions are seeing members coming to their doors in droves. Even if your credit union isn't seeing huge growth, we bet you're seeing an increase as people find it isn't as tough to switch as they thought. According to NAFCU, traffic on the credit union finder www.CUlookup.com, has increased 350% since all the hoopla began.

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Do Business Lending on Small Business Saturday
Thanksgiving Days After: Shopping Local Businesses. Making SBA Loans.
Thanksgiving: a day we give thanks for our blessings and celebrate the one day we don't think about our diets. Well, not much. On Friday, we shop. And now there's Small Business Saturday. Celebrated this year on Saturday, November 26th, Small Business Saturday encourages people to shop the small business in their communities and stimulate their local economy.

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SBA/Loan Agent/Broker Fraud: What's Your Responsibility?
This is the second in a series of eBulletins addressing SBA agent/broker fraud, an issue amounting to more than $300 million in criminal investigations involving loan agent/broker fraud the SBA Office of Inspector General's Investigations Division has conducted over the past 10 years.

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Credit Union SBA Lending: Why It's a Good Thing
As a long-time advocate of credit union member business lending, I remember the SBA's decision in the early 2000s to no longer allow credit union SBA lending. After that, I worked behind the scenes with the credit union trade organizations on advocacy strategies to bring SBA lending back to credit unions.

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NewsFlash: SBA Loan Centers Latest & Greatest
What's that they say about hot off the presses? Chances are we're among the first to alert you to the SBA's Loan Centers Coming Attractions for later this year and early 2012. On August 23 we attended an SBA Roundtable held for the Santa Ana District Office. Director of Office Finance Program Operations John Miller who oversees all SBA Loan Processing and Servicing Centers shared important information about upcoming changes.

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Liquidations: Dealing With an Unfortunate Fact of Life
In this roller coaster economy, liquidations are an unhappy fact of a business lender's life. They will happen. Some SBA loans on your books will go bad and require foreclosure, selling the business collateral, and complying with the SBA's liquidation procedures. Liquidations take time, resources and in-person oversight when you'd much rather focus on the business of profitable business lending.

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SBA Lender Alert: Red Flags for Fraud
As an SBA lender, you're a critical gatekeeper in avoiding loan agent/broker and borrower abuse, unethical conduct and criminal fraudulent activity. First, let's define the difference between fraud and regulatory violations.

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SBA Loan Agent/Broker Fraud: Let's Talk About It
Loan agent fraud: It's time to talk about it. If you attended NAGGL's Spring Lending Technical Conference, you got the latest low-down on the increasing incidence of loan agent and borrower fraud from the source, Glenn Harris, Counsel to the Inspector General, in the SBA Office of the Inspector General.

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SBA Lenders: Take the E-Tran!
Back in the day, Duke Ellington gave us fast-track directions from Brooklyn-thru-Harlem-to Manhattan: Take the "A" Train. As an SBA lender, your borrowers will appreciate your speedy turnaround on SBA Term Loans and Lines of Credit approvals when you take the E-Tran!

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Quick Snapshot: SBA/SOP Q&A
SBA and business lending conferences are great opportunities to share ideas and address issues affecting SBA lenders and lender service providers. We've attended several recently where questions came up about the SBA's latest SOP revisions, issued in October 2010. When the SBA issues new SOP revisions this fall, we'll address them in detail. In the meantime, this Q&A may answer any lingering questions or concerns about the current SOPs.

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SBA Loan Reviews. An Ongoing Process.
With the SBA stepping up its review activity, the quality of your files and how complete they are is critical. It doesn't work to simply close loans and put them on the shelf. Ongoing servicing of the loan and file maintenance are the critical pieces. Preparing for an SBA review begins long before the review is scheduled. Avoid the need to take actions immediately before an SBA review.

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How Do You Know When an SBA Loan is Needed?
Your financial institution has a goal of increasing commercial loan volume and you're reviewing an application from a local small business. After evaluating the business owner's information, it's evident that the business doesn't meet the qualifications for a regular commercial loan. Do you reject the application outright? Or do you explore the possibility of an SBA loan to assist this business? What factors will help determine the borrower's eligibility for SBA loan?

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Marketing: Plan on it!
"Next to doing the right thing, the most important thing is to let people know you are doing the right thing." -- John D. Rockefeller -- As a business lender, you help small businesses find their strategies by clarifying objectives, setting timelines for goals, and explaining procedures to carry out necessary tasks, all designed to help them increase their visibility - and their profitability. The same holds true for your institution. If you're serious about business lending, you owe yourselves a solid marketing plan.

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SBA Lending: The Bright Side in Roller Coaster Times
Our economic history over the past 75 years has taught us some valuable lessons: 1) that the only certainty is uncertainty and; 2) as Little Orphan Annie sang in the musical, "Annie" - "The sun will come out tomorrow."

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Your Institution’s Big 'Asset Surprise'
What's your institution's greatest asset? You might pinpoint the cash value of your deposits and the loans on your books. And you'd be right. But don't overlook one of your most valuable assets: your employees. In study after study, the most successful organizations rate "people" as among their most valuable assets.

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Benefits of Outsourcing Your SBA Program
Is it time to trim the fat and tighten the belt? We're still in a roller coaster economy. With the New Year around the corner, many institutions are analyzing their operations, keeping profitable projects or divisions and paring down or eliminating the rest. These are tough decisions.

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ACQUIRING AN SBA PORTFOLIO? KNOW WHAT YOU'RE BUYING - AND PREPARE
"SBA loans have a guaranty so we're good." How often we hear that statement from clients going through a merger or an acquisition!

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SBA's L/LMS Lender Portal Moves to New Online Site, Features Recent Enhancements
If you're an SBA lender with access to the SBA Office of Risk Management's (OCRM) Loan and Lender Management System Portal (L/LMS), your organization should have received notice of the upgraded Portal's new web location.

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Preparing for SBA Audits .... Proactive Portfolio Management Will Help You Sail Through
With the SBA stepping up its audits, the quality of your files and how complete they are is essential. File maintenance is the critical piece. It doesn't work to simply close loans and put them on the shelf. The key: proactivity.

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Working with Brokers: Avoiding the Quagmire
This is the second article designed to assist you in avoiding broker abuses and to guide you in evaluating and dealing with brokers.

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Managing Broker Relationships
This is the first of two articles designed to assist you in avoiding broker abuses and to guide you in evaluating and dealing with brokers.

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SBA Lending Makes Dollars and Sense!
We all agree: Even in this environment, you need to lend in order to grow. And there isn't a better time to take advantage of SBA lending.

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eDocs-Express -- Do More With Less
Everyone is facing pressure to cut expenses, reduce staffing and make operations dollars go further without compromising performance. eDocs-Express provides loan document outsourcing for community banks, credit unions and community development corporations. Our clients have the benefit of the loan document power of LaserPro and experienced processors without the large investment of a fully staffed loan documentation department.

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J.R Bruno & Associates Honored By The National Association Of Government Guaranteed Lenders (NAGGL)
Leading business lending consultant Joanna Bruno wins two key awards at the 25th Annual NAGGL Conference on Small Business Lending in Phoenix, Arizona October 27 & 28. SBA Administrator Karen Gordon Mills delivers the keynote address.

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SBA's Loan and Lender Monitoring System
Topic of the Moment: SBA's Loan and Lender Monitoring System (L/LMS). What is it? How does it work? How does it benefit lenders? For some time, lenders have asked these about this key component of the SBA's Lender Risk Based Oversight. Attendees at NAGGL's spring conference heard OCRM Director Bryan Hooper give a much-needed overview on which this article is based.

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'MUSTS' for Business Development
A sales effort is necessary for business survival. Motivating potential customers is essential for the business cycle to keep spinning. Banking, however, isn't like selling single ticket items. Business banking inherently represents an ongoing relationship between outfit and financial resource. The common goals: promote healthy operations and foster growth. And how do you partner with winning businesses? - Find them. Intermingle with them.

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Managing Your SBA Portfolio
It's easy to get into a habit that earns revenue on the front end. Closing loans is great for the books, but managing your loan portfolio after the fact is critical to your bottom line. Many financial institutions focus their efforts on booking and closing their SBA loans. Yet they let critical servicing responsibilities fall through - a bad habit that can put their SBA loan programs at risk. Disbursed loan funds not following the Authorization, failure to review current financial statements, letting Express loans mature without renewal... will lead to losses and denied SBA guarantees.

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Doing Business - and Business Lending - in Tough Times
We're in turbulent times. With the stock market fluctuating hourly & the global economy struggling to right itself, you have little control over the economy or possible loss of revenue during this crisis. There are encouraging signs. The Treasury Department's disbursement this week from the Troubled Assets Relief Program (TARP) to banks across the country will ease the credit crunch, and you'll be better able to lend. The housing market has taken a slight up-tick. And now there's the Fed's half-percentage point rate cut.

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Turbulent Times: Time for Credit Union SBA Lending!
We're certainly in turbulent times. With the stock market fluctuating hourly and the global economy struggling to right itself, what are the prospects for America's credit unions? They're good. As you may know, history tells us that times of economic turmoil are growth times for credit unions. From 1936 to 1941 the nation's number of credit unions doubled and membership tripled, while other financial institutions across the country failed.

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SBA Lending: Time to Jump In!
Member business loans are the fastest growing category for credit unions. The latest Callahan data shows member business loans up 18.1 percent, outpacing all other loan categories to reach $24.6 billion at mid-year. The reasons: In this economy, entrepreneurial small businesses are growing fast. Baby boomers not ready to retire, executive women weary of the glass ceiling, Gen Y'ers who see their parents go through mergers and downsizing - and the parents themselves - are establishing businesses.

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SBA Lending: Great Opportunity!
SBA lending is a fast-growing market for financial institutions. With the decline in residential mortgage lending, financial institutions are increasingly interested in commercial and industrial lending to generate income. Another reason: In this economy, entrepreneurial small businesses are growing fast. Baby boomers not ready to retire, executive women weary of the glass ceiling, Gen Y'ers who see their parents go through mergers and downsizing - and the parents themselves - are establishing businesses. Add this to existing businesses needing capital and you have a thriving marketplace.

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J.R. Bruno & Associates Expands
The company responsible for the most proficient model of small business lending consultation is growing. Personnel additions at J.R. Bruno & Associates have created extra resources, mobility, and effectiveness behind the doors of its nearly virtual operation. Rebecca Mendoza and Ryan Coughlin join the firm’s Southern California office, and Staci Sheehan oversees the newly opened East Coast office, operating out of Boston.

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SBA Workouts and Liquidation
SBA workout, liquidation, and collateral exhaustion processes are clearly defined; however the SBA’s role in directing them has diminished. In January 2004, the SBA centralized its portfolio of 7a liquidations loans at the Herndon National Purchase Center in Herndon, VA. As part of this centralization, the SBA reduced its direct efforts throughout the liquidation process. This puts additional pressure on Lenders to take full control over their troubled SBA loans.

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Seeing the Downside: Importance of an Exit Strategy for SBA Lenders
Understanding exposure and mitigating market risks - both direct and indirect - is as crucial now as it has ever been in our documented economic history. Several experts say that we are in a recession. This statement can’t be made official until additional figures are posted and corroborated. (Consumer Spending, Inverted Yield Curve, Rising Unemployment & Inflationary Pressure being the four key elements). Regardless of the technical ruling, it’s obvious that times are tough.

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(248k)
Profitability in Small Business Lending
Home foreclosure rates and delinquency notices are continuing to rise. In May of 2007, they're 90% higher than '06. Refinance rates have stopped falling, but show no sign of improving in the near future. Nearly every major financial institution has discussed that their credit standards are tightening. Home inventories are rising in every market as prices decline. All of these factors point to the fact that profits associated with mortgage lending will continue to drop in the near future.

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(245k)
The SBA Gives Back to Veterans
SBA Lending is more than just 504's! To prove it, the SBA has added a new program called the Patriot Express Pilot Loan Initiative to help veterans and members of the military looking to start or expand small businesses.

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(254k)
We’re Ready For An SBA Audit Even if You Aren’t
There’s no avoiding it. Sooner or later you will encounter the stark reality of an SBA lender over-site audit.

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Announcing Addition to GAP Team
J.R. Bruno & Associates is pleased to announce the addition of Alicia Moselle to our GAP Team. She will be providing lending services throughout the Tri-Counties (Ventura, Santa Barbara, and Los Angeles) area.

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(244k)
Efficiency Through Effecting Change
In any system, there are bottlenecks that reduce output. Do you know where those points are in your loan department? If you don’t, you should; if you do know, what have you done about it? Consider this: an investigation into your workflow and procedures by an objective third party can provide a fresh perspective, and may uncover issues that need to be resolved.

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Getting your SBA License: Easier than you think!
Many institutions have eased into small business lending with real estate loans and small credit lines. If you’re interested in taking the next step and pursuing SBA lending, the first place to start is with your SBA (License) application. You may have heard that it’s tough for smaller credit unions to get, or that there are onerous restrictions on new lenders. Not true! The application can be broken down into two parts: the questionnaire, and the documentation.

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Advantages of SBA Lending
Member Business Lending can be one of the most profitable segments of a Credit Union’s business. It carries, however, some significant risks along with those rewards. SBA Lending is great tool for Credit Unions, of any size, to mitigate those risks, and add some additional rewards. We have detailed here some of these benefits.

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Beat the Clock
Credit Unions across the nation are investigating business lending. Some have included business services in their strategic plan, or are planning to get into it "next year" or "in the future." Others have approval from their boards and may be licensed with the SBA, but have done little to move forward. There are also those who have started the process but have failed to see loans materialize. If your credit union fits one of these descriptions, read on.

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Business Lending: What will it cost me?
As business lending consultants, one of the questions we hear most often is also one of the toughest to answer definitively: what will it cost my credit union to get started? The two biggest variables that will influence your startup costs are: how much can you do with what you have, and, how much do you want to outsource?

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The Pitfalls of Business Lending
In the first year of operation, commercial lending products can earn between 30 and 50 percent returns. Not surprisingly, many credit unions are turning to member business lending and SBA lending to restore profitability, especially as consumer loan growth continues to dwindle. What is it that separates successful business lenders from other credit unions? Two things—a commitment to building and maintaining solid relationships with members and an in-depth knowledge of small business lending.

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Professional Partnering
Professional partnering is an excellent way for Credit Unions to reach out to their communities. One opportunity is the relationship between a Credit Union and the local Certified Public Accountants (CPA’s).

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Small Business Lending and the CUSO
Credit Unions across the country are looking at ways to enter Member Business Lending. One way that is generating attention is to form a CUSO. A big advantage can be the sharing of costs -- partnering with another credit union can lower many of the costs associated with developing a business lending program.

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(54k)
Adding SBA to your MBL
Is your Credit Union considering Member Business Lending? Many Credit Unions are investigating their options and evaluating their goals and strategy, while others is content to dabble in commercial real estate. Whether you are just looking to MBL or have already set a plan in motion, consider the US Small Business Administration 7(a) Loan Guarantee Program. A SBA loan program can make a good MBL department great.

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(55k)
Marketing your Program Through the Community
One of the key differences separating successful business lending programs from those going nowhere is marketing. Often we speak to credit unions that sent their staff to training seminars, invested money in software, and developed infrastructure to pursue business lending, only to find that they have no loans to support these new expenditures. Why don't they have loans? Frequently, the answer is a lack of marketing.

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(53k)
The Value of Partnerships
Partnership. Cooperation. Business lending. These three words are not often seen together. Credit Unions, however, renowned for cooperative efforts and the ability to forge partnerships are changing that.

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(54k)
Participation Considerations
There is no doubt that business lending is one of the hot button issues for 2004. The NCUA, the US Small Business Administration, and all of the trade organizations have weighed in with ideas, opinions, and rulings designed to help Credit Unions down the path to offering small business loans. But, business lending is not a simple process; it takes careful planning and expertise.

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(53k)