It’s Spring Training for the boys of summer and no doubt the curveballs are coming. And that’s not the only place we’ve seen a curveball or two, or more. We’re well into Spring Training for SBA lending and already we’ve seen multiple updates, CARES Act revisions and new guidance stemming from the spate of SBA notices just this year.
Those curveballs just keep coming. Not to mention fast balls whizzing in from breaking news: increased access for businesses with 20 or fewer employees, sole practitioners, applicants with delinquent student loan debt and/or prior non-fraudulent felony convictions, and non-citizens residing legally in the U.S. Enough new applications to make your head spin. And of course, you have loans already in process.
What’s a lender to do? Be proactive. Here are a few suggestions to help get you ready when you step up to the plate:
Maintain communication with your borrowers. SBA is notifying your borrowers for a variety of reasons, that they’re newly eligible for assistance, that their Section 1112 payment periods have changed, and on and on. Also, many people research available assistance but aren’t sure if it applies to their situation. They expect clear communication. And they’ll appreciate your reaching out. Use all of your communication channels, targeted direct mail, newsletters, specialized phone menus, your website – whatever is available.
Anticipate what your borrowers will need. A deferment? A catch-up plan? Maybe your borrower had been granted a full or partial deferment and opted to cancel, anticipating the longer CARES Act payment periods. As we all know, SBA Procedural Notice 5000-20095 shortened things up. Be ready to reinstate the deferment if appropriate or determine another acceptable payment plan.
Obtain current financial information. This helps in so many ways. Having this information helps you better understand your borrowers’ financial situation and fulfills the SBA’s guidelines for keeping your loan files up to date. Do you have reluctant borrowers? Emphasize that the SBA loan is a partnership between borrower and lender. Knowing that both need to do their part can help a borrower understand that providing financial information is their way of helping you as a lender help them.
Stay up on SBA Procedural Notices and updates. Stay ahead of the curve. Read notices straight through as they come out. Share key information with your team. If necessary, conduct a training session so everybody will be ready when those fastballs head your way.
As always, our JRB Team is here to assist you. Contact JRB.