Transcript Purpose of the 504 Loan Program

WPASGL Small Business
Lending Conference
Seven Springs Mountain Resort
March 13, 2014
SBA Office of Financial Assistance
Linda Rusche, Director
1
SBA Loan Programs
• Tools that enable lenders to meet the needs of their
small entrepreneurs
• Public/private partnership
• Creating jobs
• Stimulating economic activity
2
7(a) & 504 Portfolio Overview
7(a) Balance Sheet
Gross Active Balance
Active Loans
504 Balance Sheet
$59,303,856
235,296
Gross Active Balance
Active Loans
$27,142,193
60,927
Current Balance
$55,663,081
Current Balance
$25,858,842
Past Due Balance
$490,515
Past Due Balance
$101,105
Deferred Balance
$122,484
Deferred Balance
$79,683
Delinquent Balance
$769,284
Delinquent Balance
$371,015
Liquidation Balance
$2,258,491
In Catch-up Balance
$731,546
Non-Current Balance
$3,640,775
Non-Current Balance
$1,283,351
Active Purchases
$6,164,557
Active Purchases
$1,566,930
Total Exposure
Note: dollars in thousands
Data as of December 31, 2013
$65,468,414
Total Exposure
$28,709,123
Note: dollars in thousands
Data as of December 31, 2013
3
7(a) Loan Production
53,710
60,000
47,000
44,376
50,000
46,395
40,000
Dollars ($M)
30,000
20,000
$12,473
Approvals
$19,780
$15,318
$17,974
10,000
0
FY 2010
FY 2011
FY 2012
FY 2013
4
7(a) Portfolio Comparison
285,247
270,948
250,267
237,069
300,000
250,000
200,000
Balance ($M)
Active Loans
150,000
100,000
$46,220
$51,586
$54,555
$58,190
50,000
0
2010
2011
2012
Fiscal Year End
2013
► The 7(a) active portfolio has been experiencing a trend of increasing
dollars and decreasing loans since the expiration of the Jobs Act, which
increased loan ceilings, at the beginning of FY 2011
5
504 Production
10,000
9,594
7,835
8,015
7,708
8,000
6,000
Dollars ($M)
Approvals
4,000
2,000
$4,465.3
$4,992.1
0
FY 2010
FY 2011
$7,284.6
$5,227.4
FY 2012
FY 2013
FY 2012 increase was impacted by 504 Refinance Program which ended 9/27/2012.
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504 Portfolio Comparison
55,143
58,980
56,891
61,094
70,000
60,000
50,000
40,000
$23,269
$23,860
$25,348
$27,176
Balance ($M)
Active Loans
30,000
20,000
10,000
0
2010
2011
2012
Fiscal Year End
2013
► 504 Active Portfolio has been experiencing a trend of increasing dollars
and loans over the past 4 fiscal years. While this trend was showing prior
to the Jobs Act, the increased loan limits at the beginning of FY 2011
have intensified this trend.
7
504 Program Job Creation
140,000
127,357
120,000
100,000
80,000
88,138
91,045
17,070 20,001
55,194
19,356
60,000
40,000
71,068
20,000
92,280
71,044 72,163
Jobs Retained
Jobs Created
72,924
FY 2010
FY 2011
FY 2012
FY 2013
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NOTE: As Voluntarily Reported
221
FY 2013 Public Policy Achievements
1,155
1,210
Improving, Diversifying or Stabilizing
the Local Economy
986
Rural Development
1,000
Minority Business Development
83
Women-Owned
500
Reduces Unemployment in Labor
Surplus Area
79
Business District Revitalization
53
Veteran-Owned
39
Energy Public Policy Goals
Expansion of Exports
5
Increase Production & Competition
Federal Budget Cutbacks
Business Restructuring - Federally
Mandated Policies
504 Public Policy Achievements
1,500
1,263
720
370
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What's New??
• SOP 50 10 5 (f) Effective January 1, 2014
• Streamlined small loan program underwriting
• Clarified collateral requirements
• 1919/1920 replaces former form 4/4-I for larger loans
• 504 forms also revised to align
• 504 and 7(a) Regulation to be published soon
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7(a) PARRiS Review Protocol
 The PARRiS concept identifies five key components of lender risk to SA.
P
A
R
Ri
• Performance
• Asset
Management
- Quality of key
• Regulatory
Compliance
- 1502 Reporting
• Risk
Management
- Corporate
& SBA
regulatory (CFR,
SOP, etc.)
compliance
governance, and
internal controls
- Calculated Risk
Rating and cash
flow
lender
origination,
servicing and
workout
processes
S
• Special
Items Additional high
risk lender
behaviors
identified by
OCRM
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504 SMART Protocol
S
S
• Solvency and Financial
Condition
M
• Management and
Governance
A
• Asset Quality and
Servicing
R
• Regulatory Compliance
T
• Technical Issues and
Mission
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SBA One
SBA One will lower lender
transaction costs
•
Streamlining SBA process will reduce
the cost of making a standard SBA
loan by an estimated $6,806 and save
87.5 hours of processing time.
SBA One will reduce paperwork
•
SBA One will lower improper
payments and repairs/denials
•
Unifying 7(a) lending under one set of
forms will simplify documentation for
borrowers and lenders.
Performing eligibility screening upfront
will deter ineligible loans from being
approved.
SBA One will connect borrowers to
SBA lenders
•
Leveraging an improved data
management system will expand access
to capital through SBA’s extensive
lending network.
13
SBA Veterans Advantage
Effective January 1, 2014
Express loan product
Veterans, spouses and related individuals (see SOP)
Zero fees on all loans $350,000 and less
See SBA Notice 5000-1299
14
Community Advantage
•
The Community Advantage Network has 79 mission-based lenders across
the country providing 7(a) loans to underserved markets
– CA Lenders have had success partnering with national and local banks for
capitalization support and also deal referrals – doing loans the banks won’t due,
providing borrowers with necessary technical assistance, etc.
– 3 CA Lenders are in PA: The Progress Fund, Regional Development Funding
Corporation, Washington County Council on Economic Development
– 3 Nationwide CA Lenders: Empire State CDC, CDC Small Business Finance,
and Local Initiative Support Corporation
– Program currently has $84 million in loan approvals since it was initially created
in FY11
15
Community Advantage
•
CDCs are an eligible organization which may be approved as a Community
Advantage Lender
–
•
New Program Guide to be published shortly
7(a) loans of $150,000 or less are up in FY14 versus the same time period
in FY13
–
Up 7.6% in numbers of approvals and 11.3% in dollars approved
•
7(a) loans to minorities are also up in FY14 across all categories/ethnicities
•
HQ Contact: Grady Hedgespeth, Director, Office of Economic Opportunity
–
–
202-205-7562
grady.hedgespeth.sba.gov
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7(a) Program Contacts
7(a) Loan Program Branch
Dianna Seaborn, Chief
Sloan Coleman, Financial Analyst
Justine Alston, Financial Analyst
Meghan Milloy, P(202) 619-1654
202-205-3645
202-205-7737
202-205-7623
202-619-1654
[email protected]
[email protected]
[email protected]
[email protected]
SBA Sacramento Loan Processing Center (SLPC)
Frank Pucci, Center Director
916-735-1969
[email protected]
17
504 Program Contacts
504 Loan Program Branch
Linda Reilly, Chief
Warren Boyd, Financial Analyst
Bob Carpenter, Financial Analyst
Eric Wall, Financial Analyst
202-205-9949
202-205-7534
202-205-7654
202-619-1825
[email protected]
[email protected]
[email protected]
[email protected]
SBA Sacramento Loan Processing Center (SLPC)
Richard Taylor, Center Director
916-735-1221
[email protected]
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