Overload. We see it happen a lot, especially to our clients at small institutions that have just 1-2 people working on new loans along with everything in their existing portfolio. It’s hard to manage when new applications and servicing requests or liquidations all increase at once. Overload happens to me, too. When it does, I’m often reminded of a song lyric…”Chaos calls but all you really need is to just breathe.” It hums through my head all day when I’m going in a hundred different directions between meetings, conference calls and client projects.
I’d like to offer sage advice of my own for when overload loads up on you, but all I come up with is “Breathe. Just Breathe.” And – importantly – rely on the steadfast procedures you’ve already written to keep you on course. So the best advice we can give is to evaluate the work flow, prioritize — and delegate what you can. Other people may be able to help with the process and follow the procedures that keep to the system that works best and protects your guaranty. And of course, it’s a good idea to review and update your procedures at least annually or when SBA issues a new SOP or an Information/Policy Notice that makes critical changes.
To help you stay on track, here are some common areas where procedures can break down:
- Loan processing and closing. If you have a well-integrated program, you’ll often see a loan start in your SBA Department and end in the Loan Ops Department for closing and funding. Many Loan Ops departments have commercial experience but don’t necessarily have SBA experience. Your “pesky” procedures will help here. They’ll give Loan Ops staff confidence when closing a loan according to SBA’s expectations of what should be on file prior to closing and what should be on file to properly document closing and funding.
- Action on a servicing issue in a timely manner. This can include anything from a new location notification for an existing loan to a notice of default. These items eclipse all others because SBA holds lenders to a specific time frame. So be sure your procedures – and your staff – address those timeframes and if necessary, outsource to ensure that you meet those deadlines.
- When you don’t do liquidations regularly it’s common to forget your procedures. Many times, loans will go from your SBA Department to a Special Assets team for liquidation, and they may or may not have SBA experience. Chances are they won’t recognize the instances when SBA approval is required, or maybe situations when a settlement agreement calls for release of a guarantor. So they charge full speed ahead with the best intentions. Their action may be the best option, but without SBA approval the expenses may not be reimbursable or the action could jeopardize the guaranty. Procedures will eliminate these occurrences or at the least reduce them.
How often do we say, “Document, document, document”? But before doing that, you need to set up procedures that will guide you through the proper documentation. And when in doubt: Just Breathe.
At JRB, we’ve helped lenders breathe easier for 25 years. We can assist you with anything – or everything – from underwriting assistance, to loan reviews, to portfolio management, to servicing and liquidation. Let us take the load off!