If you have further questions on any of the items mentioned in this newsletter, please contact Tom Daiber, Bill Vickery or Bob Newman.
The St. Louis District Office wishes you
and your loved ones a safe and happy
SBA-Guaranteed Lending to Veterans
Unless it's extended, The Patriot Express Pilot Loan Initiative (PX) is scheduled to expire at the close of business on December 31, 2013. If your bank has delegated authority for PX loans and an applicant’s ownership is at least 51% owned by a veteran, transitioning service-member, National Guardsman or reservist; their spouse; or widow of a service-member killed in action, you may wish to consider using the program to originate an SBA-guaranteed loan or revolving line of credit before the end of the calendar year. The guaranty on PX loans of $150,000 or less is 85%; 75% over $150,000 through the program’s $500,000 maximum.
On November 8, 2013 Acting SBA Administrator Jeanne Hulit announced new measures to help get small business loans into the hands of veterans by setting the borrower upfront fee to zero for all veteran loans authorized under the SBA Express program up to $350,000. This initiative will start on January 1 and continue through the end of the fiscal year, September 30, 2014.
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Beginning January 1, 2014, most 7(a) loan programs will begin using the same principal forms, SBA Forms 1919 and 1920. Many of the current forms, including SBA Form 4 and SBA Form 2301, will be obsolete and no longer accepted by SBA. This change of forms coincides with the change of SBA’s SOP 50-10-5(F) replacing SOP 50-10-5(E) as the Agency’s principal guideline for how it guarantees small business loans.
The new SBA Forms 1919 and 1920 are in clearance and will be posted as soon as possible. If you expect to submit a package to SBA during the late December or early January period, you may advise your customer of the form change and that they may need to execute new ones if the package is submitted earlier or later than expected.
Also beginning January 1, 2014, all 7(a) loan packages must be submitted using E-Tran. In the future, SBA will require all loan applications be submitted electronically. Most loan officers working with SBA loans have signed up to use E-Tran. If you have not, please go to E-Tran to request access. The Lender Relations Specialists are working on setting up a webinar on how to use E-Tran. Details will follow when available.
The Export Working Capital Program (EWCP) will continue to use EIB-SBA Form 84-1 and will not be affected by this change.
Effective January 1, 2014, All SBA Loan Applicants Will Require a DUNS Number
Effective January 1, 2014, all SBA loan applicants must have a data universal number system (DUNS) number from Dun & Bradstreet (D&B) for input into SBA's E-Tran system. If your customer is unsure whether or not they have a DUNS number, they may call 800-700-2733. If they don't have one they can register with D&B. Obtaining a DUNS number is free.
Call Report Risk Rating of SBA Loans
Did you know that per FDIC call report instructions, your institution only needs to include 20% of the guaranteed portion of the SBA loans that you originate and hold in your portfolio in your risk based asset computation? This compares to a risk based rating of up to 100% for non SBA guaranteed loans. Originating SBA loans can help our economy and our small businesses, and it may also allow your institution to lower the amount of regulatory capital that it is required to maintain against the same outstanding amount of loans. Less required capital can mean a higher return on equity.