SBA 7(a) program
CTC Consulting conducts an all-inclusive Review of a lender’s SBA 7(a) portfolio. It consists of the following four components.
Portfolio Performance
The portfolio performance analysis consists of an assessment of the lender’s SBA loan portfolio to evaluate historical, current and projected performance. Additionally, it identifies various risk characteristics of the portfolio.
Key elements include:
- Outstanding SBA portfolio;
- Portfolio composition;
- Delivery method performance characteristics;
- Loan Production Activity;
- Comparative performance rates analysis with overall SBA portfolio and peer group performance rates;
- Active Purchases;
- Industry concentrations and their risk implications;
- Geographical concentrations and their possible risk impact;
- Early Defaults;
- Guaranty Purchases;
- Predictive Indicators; and
- Any other segmentation of the portfolio with risk implications.
Management and Operations
It assesses the effectiveness of the lender’s management of its SBA loan program.
Key elements include:
- Corporate Organization;
- SBA Management;
- Adequacy of SBA training;
- Delegations of Authority;
- Strategic/Operating plan;
- Internal Oversight;
- External Oversight;
- Adequacy of internal controls;
- Lender’s standing with its Regulators; and
- Any other characteristics with risk implications.
Credit Administration
It assesses the lender’s ability to evaluate, process, close, disburse, service and liquidate its SBA portfolio in accordance with SBA loan program requirements.
Key elements include:
- Determination of creditworthiness;
- Collateral analysis;
- Closing procedures;
- Disbursement of loan proceeds;
- Regular servicing;
- On-going assessment of continued creditworthiness;
- Collections;
- Intensive servicing;
- Liquidations;
- Management of Active Purchases;
- Consistency with SBA policy;
- Risk Rating mechanism;
- Internal controls;
- Loan agents/Brokers;
- Loan Sales; and
- Participations and Securitizations.
Compliance
Participation in the SBA loan program imposes unique loan origination, servicing, liquidation, and reporting requirements on the lender. The Review assesses lender’s compliance with all such requirements, which include:
- Eligibility;
- Reporting;
- Payments;
- Recovery Act; and
- Other compliance matters relating to servicing and liquidation etc.
Benefits of the Review
- Identification of any weaknesses or problem areas;
- Suggestions/Recommendations to ensure compliance with all SBA lending requirements; and
- Suggestions/Recommendations to improve overall efficiency of the loan operation.
