Greater Efficiency. Process Improvement. Worthy objectives, yet when we’re slogging away and on overload, they can get overlooked. In this time of high loan volume, this could – and often does – happen. We can’t afford that because as we know, efficiency can make a huge difference. From time-to-time a CDC will ask me to take a look at its underwriting processes to see if any efficiencies can be gained. Often, my Rule of Thumb sums it up: “Stop asking for what SBA doesn’t want.” Some examples:

Franchise Agreements on approved franchises. If the franchise is on SBA’s approved list, SBA has reviewed the Franchise Agreement and found it eligible. If the franchise isn’t on the list, sending the Franchise Agreement along with a Loan Authorization request won’t do anything.

What to do? First, check out SBA’s approved franchise list. If the franchise is there, fill in the boxes in Ventures and move on. But if the TPL gives you a Franchise Agreement, they mean well, so say “Bless your heart” and put it in the recycle bin.

Extra SBA Form 912s. If your applicant isn’t a convicted felon, you don’t need to submit Form 912 to SBA.  Oh, I know that sending the applicant a birthday card is a major part of your marketing effort, and the 912 lists the correct birthday under penalty of federal law. But the applicant’s birthday is already on the 1244, along with a history of any criminal activity. So why ask again?

Extra Financial Statements. Question: How many years of personal tax returns does SBA require? I’ve seen some of you say “Three.” No need.  One will do. SBA wants only a full copy of the last personal federal income tax return filed. Please don’t waste SBA’s time – and yours – by giving them three times the paperwork they asked for.

My Second Rule of Thumb. If a number is on the spread sheet, I don’t repeat it in the narrative. The SBA loan officer really can read a spread. Although your CDC must explain why the numbers are what they are, why waste SBA’s time by being redundant?

I am always glad to work with a CDC to improve efficiency and to build capacity. Let me know if I can help.

Richard Jeffrey