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Business Lending Community ‘Must Reads’
We provide an ongoing stream of articles on issues concerning the business lending community.
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Media ContactTo request a speaking engagement or arrange an
interview, contact media@jrbrunoassoc.com
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.
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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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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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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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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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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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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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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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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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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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