What’s in a name? Whether it’s a daughter, son, niece, nephew, grandchild or godchild, naming the baby is a big deal. If you’re in the market for a baby name, you might want to check out names trending in 2021/2022. I did. Looks like we’ll see lots of Emmas, Olivias and Amelias, and Noahs, Liams and Olivers enrolling in preschool in a couple years. But I don’t write eBulletins to help you name the latest baby in your world. And I’m not talking about the 2022 New Year’s baby who is yet to be named.
I’m talking about the way your lending department names your loans. Most financial institutions name their loans after the borrower. But whether motivated by a desire to be different, or for some other equally reasonable motive, SBA requires loan names to follow the Agency’s protocol. That requires the loan name to be the first available name on this list:
- dba of the Operating Company;
- name of the Operating Company;
- dba of the Borrower; and coming in last …
- name of the Borrower
When there are multiple Borrowers or Operating Companies, SBA applies the same rule using the first Borrower or Operating Company listed by the Loan Officer. Okay, that’s easy enough. But careful with Franchises! Just remember that the name of the business can NOT be the name of the franchise. There might be hundreds of Burger Kings in a city, but probably only one is your client.
I think the real reason for SBA’s naming protocol is that is that SBA makes loans to businesses not to individuals. After all, SBA has a middle name: “Business.” So SBA protocol would name a loan “Happy Days Again Bar” rather than “Smith, Alfred E.”
Of course, SBA’s protocol is bound to confuse every commercial lender on your loan committee. And you can expect new employees not initiated in the sacred rituals of SBA to be frustrated when they’re told to look under “H” for the Smith loan. But using SBA’s preferred list, you should be able to catalogue your loans accurately and welcome each loan to SBA’s world – with a name!
Got something on your mind besides loan names? As always, I’m here to answer your questions and assist your CDC’s SBA loan program. Here’s to giving 2022 a name: Successful!