SBA | Lender News | December 2013

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December 2013

The Lender's Advantage

Brought to you by the West Virginia District Office

A Message From The Director

First, I would like to start off by saying happy holidays and thank you for an outstanding fiscal year in 2013. I am pleased to announce a more than 11.5% increase on the number of loans made in West Virginia from fiscal year 2012 to fiscal year 2013 totaling 183 loans for more than $39.5 million dollars. I would like to thank you, all of our participating lenders, for the hard work and dedication you gave this year in helping our West Virginia small businesses start, grow and succeed.

I hope that 2014 leads to more West Virginia businesses receiving SBA guaranteed loans. To help do this, the SBA has recently released two initiatives to help get lower-dollar business loans into the hands of entrepreneurs.

Effective Oct. 1, 2013 SBA-supported loans under $150,000 have zero loan fees. Setting fees at zero effectively makes these loans cheaper for borrowers and encourages lending to small businesses that face the most constraints on credit access. In Fiscal 2013 there were 116 SBA guaranteed loans approved to West Virginia small businesses in the amount of $150,000 or less, representing 73 percent of the total loan approvals in the Mountain State. Previously, borrowers utilizing the SBA guarantee through participating lenders would pay up to two percent of the guaranteed portion on these loans, which would commonly cost a small business owner up to $2,550 in fees.

Another SBA initiative, effective Jan. 1, 2014, will provide new measures to help veterans get small business loans by setting the borrower upfront fee to zero for all veteran loans authorized under the SBA Express program up to $350,000. The initiative starts January 1 and continues through the end of the fiscal year.

In addition to these new initiatives, I hope that you take the opportunity to nominate one of the small businesses you work with for an SBA award, see information below. And I hope to see you on March 12th in Seven Springs for the Quality Circle Conference.

Thank you for a strong 2013 and I look forward to 2014!

Lenders MUST Submit ALL 7(a) Loans
via ETran January 1, 2014

One of the biggest changes in loan processing when SOP 50 10 5 (F) becomes effective on January 1, 2014, is the requirement that ALL 7(a) guaranty loan requests be submitted electronically through ETran. Additionally, all loans under $350,000 will follow the Small Loan Advantage (SLA) format and be credit scored (through SLA submission format). This will require all businesses to have a DUNS number. DUNS numbers are free and are to be acquired by the business at the Dun and Bradstreet website (See DUNS instruction article for details).

For non-delegated loan requests, lenders may upload up to 9MB of applicable documentation directly to ETran, or lenders can use the Send This File option (remember to reference the ETran Application Number when going this route).

Are you ready for this change? If you need assistance getting set up in ETran, or have questions, please contact your Lender Relations Specialist. NOTE: There will be an ETran training webinar on Wednesday, January 15, 2014 at 10:00 a.m. by Glenn Hannon, SBA’s ETran expert. See details later in this newsletter to register.

For more information, contact Rick Haney at 304-623-7449 or Leo Lopez at 304-347-5220.

SBA Loan Application Submission
Forms Update

When SOP 50 10 5(F) becomes effective on January 1, 2014, SBA Forms 4 (Application for Business Loan) and 4I (Lender’s Application for Guaranty) will become obsolete and replaced with SBA Form 1919 (Borrower Information Form) and SBA Form 1920 (Lender’s Information Forms). SBA is in the process of revising the new forms to comply with the new SOP but do not anticipate the new forms to be available on January 1. In the meantime, lenders are asked to use the current SBA Forms 1919, 1920 and 912 (Statement of Personal History revised 2-2013) for all loan applications until further notice.

Questions concerning these changes should be directed to the West Virginia Lender Relations Specialists - Rick Haney at 304-623-7449 or Leo Lopez at 304-347-5220.


Fee Waivers for Veterans -
Patriot Express Program Expires

On December 31, 2013, the Patriot Express loan program will terminate and be replaced with the SBA Veterans Advantage loan program. Loan guaranty requests submitted under the Veterans Advantage through SBA Express will incur a ZERO Guaranty Fee for loans up to $350,000. To qualify, small businesses must be at least 51% owned by a Veteran, Active Duty Military service member, Reservists or National Guard member, or their current or widowed spouses (same criteria as under the Patriot Express program).

As a reminder, there will be no fees charged on any 7(a) loan (including all Express loans) of $150,000 or less through September 30, 2014. Both the upfront guaranty fee (paid by borrower) and the ongoing servicing fee will not be charged.


DUNS Number Now Required
On All Loan Applications

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 ETran system. If your client 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.

Below are links to look up or apply for a DUNS number.

1. Click here for the DUNS number company lookup screen.  
(the first step to get a DUNS number)

2. Click here to sign up for a DUNS number, it features a chat area for questions.


Charging Off 7(a) Loans

The National Guaranty Purchase Center is focusing on ensuring the timely charge off of 7(a) loans.  In order to do so, they are requesting lenders prepare a wrap-up report using the 'charge off' tabs on the website. If you have indicated on your Quarterly Status Report a loan is ready for charge off, please be sure that you send the completed charge off tabs as soon as possible to the email sbachargeoff@sba.gov or using Send This File

In many cases, a review of the file shows the NGPC did receive a wrap up report, but the report was sent a while back. In reviewing the submitted wrap up reports, SBA determined several loans were not ready for charge off at the time of report submission. If you have a loan now ready for charge off, please check to ensure a final wrap-up report is sent to the NGPC accounting for all collateral, obligors and recoveries.

The NPGC is paying particular attention to loans that have been in its portfolio more than three years and will be working with SBA’s Office of Credit Risk Management to ensure lenders are following program requirements. The NGPC primary goal is to ensure every 7(a) loan is ready for charge off, and processed as such. 

You may direct your questions to National Guaranty Purchase Center in Herndon, VA at 703-487-9293 or contact the lender relations staff at the West Virginia District Office. 


Updated IRS Contact Info and 4506-T

Prior to the submission of a loan application for non-delegated lenders and prior to the first distribution for delegated lenders, verification of financial information via IRS Form 4506-T must be obtained. The form must be submitted to the IRS to obtain federal income tax verification on the Borrower, or the Operating Company if the Borrower is an EPC, for the last three (3) years unless it is a start-up.

Once received from the IRS, the tax data must be compared with the financial data or tax returns submitted with the loan application and notated in the lender’s credit memo. For a change of ownership, verification of the financial information provided by the seller of the business must be analyzed and obtained in the same manner.

A copy of the revised IRS Form 4506-T, which includes the SBA logo to ensure requests are expedited and no charge is incurred for the transcripts, can be found on the SBA web site at: http://www.sba.gov/sites/default/files/files/Form%204506T.pdf .

West Virginia lenders can fax the 4506-T to 816-292-6102 for IRS Form 1040 series and Form W-2; and to 859-669-4111 for IRS Form 1065 and 1120 series. Questions regarding the Form 4506-T may be directed to the IRS, Robert Shearer at 816-291-9727.


National Small Business Week May 12-16, 2014

The West Virginia District Office of the U.S. Small Business Administration is soliciting nominations for the 2014 Small Business Week Awards. All nominations are due by Friday, Jan. 17, 2014.

National awards categories include National Small Business Person of the Year and Exporter of the Year. National awards can be submitted through SBA’s online portal at nationalsmallbusinessweek.sba.gov/ or can be sent to the West Virginia District Office. The site also offers additional information, such as qualification and criteria, on the national awards.  Winners of the national award categories will be invited to Washington, D.C., in 2014 to compete for national titles and to attend National Small Business Week events.

In addition to the national awards, the West Virginia District Office is seeking nomination for the following district awards: Entrepreneurial Success of the Year, Family-Owned Business of the Year, Young Entrepreneur of the Year, Financial Champion of the Year, Home-Based Champion of the Year, Minority Small Business Champion of the Year, Veteran Small Business Champion of the Year, and Women in Business Champion of the Year.

District nominations must be submitted directly to the West Virginia District Office. Guidelines and nomination forms can be found by clicking here or by contacting Nikki Bowmar at (304) 623-7445 or nikki.bowmar@sba.gov.

Upcoming Training Webinars

1/15/14: ETran Origination & Servicing Webinar by Glenn Hannon, SBA’s ETran Expert – 10:00 a.m. Eastern. Presented by SBA’s Office of Financial Assistance

1/25/14: Franchise Registry for Lenders by Edith Wiseman and Paul Santomauro from FRANdata – 10:00 a.m. Eastern.

Click here for more info.

If your organization would like to schedule personalized training, please call
304-623-5631.


Coming Soon!

March 12-14, 2014
Quality Circle Conference, Seven Springs Mountain Resort