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Frequently Asked Questions
| Can you present to our board? |
| Yes, a representative of J.R. Bruno & Associates is always available to provide a detailed presentation to your board of directors and/or senior management staff.
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| How do you charge for your services? |
| Our fees depend upon your needs. Our services are tailored to each specific job and institution. Some services are billed at flat rate, and others at an hourly rate. J.R. Bruno & Associates offers free estimates and will work with you on evaluating your needs, based upon your goals, current infrastructure, and staffing. We are more than happy to discuss this with you at length and provide you with a detailed proposal.
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| How many loans do your clients starting new departments do in a year? |
| A new department may close anywhere from 8 to 800 loans in a year, depending upon how large the institution is and how aggressively the program is marketed. Most institutions we assist will close between 10 and 15 loans in their first year, and will turn a healthy profit.
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| What is a good source of SBA business? |
| The easiest source of business for a SBA lender to tap is its customer base and staff. Nationally, fewer than 5% of all customers are ever cross sold a second bank product. It costs very little to train tellers and other staff to ask a few questions when handling customers. A modest incentive to staff for referrals and closed loans will encourage them to speak with everyone they run into in their community. Nothing sells like a closed loan, and when your customers perceive your institution as "small business friendly," the word will get out.
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| How can the guarantee be protected when the loan is disbursed? |
| Document where your funds are going. Your disbursements should closely match from the 1050 Settlement Sheet to the Loan Authorization. Disburse in two party checks to vendors against invoices or purchase orders. If the disbursement is to a real estate or business purchase escrow, be sure the funds are tracked through the escrow settlement sheet. If you reimburse a borrower for funds used for loan purposes, be sure to get a copy of the canceled check and paid in full invoice to support your disbursement. The worst nightmare is a loan for the purchase of equipment inventory and working capital with a single disbursement check to the borrower.
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| How can my institution move from GP to PLP status? |
| The progress of a Lender through the SBA system depends on three basic factors. First is volume; commitment to the program is reflected best by doing deals. If you are a one or two loan per year lender, you should have no expectation of advancing. The argument of "we would do more if we were CLP" rings hollow against "we have done a lot of loans and should be CLP." Second is quality; the better your package to SBA, the higher the confidence level of the district office. Quality packages are easier and faster to process and have lower loss rates. Hard work will be rewarded. Finally there is diversity; there is more to SBA lending than real estate loans. Broaden your lending efforts to include the Prequalification and other programs, wherever possible. Today's working capital, equipment, or small loan borrower can grow with your institution to become both a profitable loyal customer and the coveted real estate borrower.
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| How can I reduce my costs? |
| We find that most lenders can reduce their costs by reducing inefficiencies in their departments. In fact, some lenders choose to outsource the entire SBA department for just this reason. While it is difficult to make accurate generalizations, we find that most lenders benefit from a J.R. Bruno & Associates Workflow & Efficiency Review.
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| How do I choose a business lending document software? |
| Lenders should consider three factors: cost, integration, and complexity. Commercial loan documentation software can vary from the reasonably priced to the exorbitant. Consider whether your projected loan volumes merit an expensive purchase. Also consider the issue of integration. Some systems integrate better than others with your core processing system. Lastly, take complexity of use into account. If the software requires extensive training, hiring may be more costly. For most lenders who do not already have a documentation software package, or an experienced commercial note department, we recommend using a vendor who can provide documents on a cost effective basis. Our preference of vendors is eDocs Express. There are other vendors in the marketplace, but we feel eDocs Express offers the best service available.
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| Can my core system handle it? |
| If you are already conducting commercial lending or member business lending, you should be able to conduct SBA lending as well. If you are currently not set up to handle commercial loans, we have a partner, Open Financial Systems (LINK to Partners page), which can provide systems and solve your core processing problems and deficiencies.
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| What is considered an affiliate business? |
| Affiliates are other businesses bound to your borrower by common ownership or control. These businesses can be affiliated either with the borrowing business or with a principal of the borrowing business. Remember to consider all affiliates when determining size eligibility for SBA. An affiliate may be a large firm in a different industry, so remember that the standard for the largest entity can be used as the standard as long as the borrowing entity is a qualifying small firm on its own. For example, your borrower is a widget retailer with average annual sales of less than $5 million. The principal, however, is a part owner in the parent's widget manufacturing business with annual sales well above $5 million. As long as the retail business and manufacturing firm in total employs less than 500 people, your loan to the retailer would be eligible.
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