Small Business Finance Institute’s (SBFI) ‘Study Hall’ offers a compilation of pertinent information to augment our commercial lender training with industry literature, articles and videos on related topics to enhance lending insight.
Small business lending is an exciting, but challenging division of the lending industry, representing a convergence of consumer lending attributes with commercial lending. The unmistakable connection to consumer lending is obvious, since most small businesses are owned by a single or small number of owners whose access to capital is tied to their personal credit record.
But these particular consumers are engaged in an enterprise designed to generate income outside the confines of a traditional job, hence they often form legal entities in which to operate that produce financial metrics that reflect their results. Being smaller though inherently provides a lower degree of metrics available from larger middle market lending, challenging lenders to accurately assess and monitor risk.
Ongoing professional development assists small business lenders to perform their responsibilities more aptly, particularly building on the observations and experiences of others in the business.
This survey provides in-depth statistical analysis about commercial real estate lending, published by ABA.
This article provides good statistical analysis about attributes of the small business finance marketplace, published by SBA’s Office of Advocacy.
Survey of small business lending produced by the Federal Reserve Banks of New York, Atlanta, Cleveland and Philadelphia.
This article provides survey results about the banking industry’s penetration into the small business sector, revealing opportunities and weaknesses, published by ABA.
This article discusses the value of using data analysis and automated decisions balance risk, costs and compliance for more profitable loan origination, published by FICO.
This paper provides analysis of how small business credit was affected by the financial crisis and emerging use of technology to distribute capital, by Karen Mills and Brayden McCarthy
Since the financial crisis, bank lending to smaller companies has receded significantly and in that void has emerged technology platforms that deliver capital directly from investors to small business owners.
There are a variety of titles used to describe lenders who manage others for the delivery of business capital, depending on the size and organization. A broad list of responsibilities must be supervised in the course of originating and administering this asset category and typically the managers will have experience in one or more of these specific skills. However, generally absent is specific training on how to manage and lead others who perform these tasks.
While some organizations are large enough to divide the management of these tasks among several individuals, smaller banks and finance companies must often manage with only one or two persons. Regardless, the job to oversee all the activities necessary to originate, analyze, underwrite, process, close, service and collect business loans should be performed with purposeful engagement, whether performed alone or in coordination with other managers.
These resources are intended to support the development and ongoing training of lending leaders in any size organization, regardless of the scope of their job.
Is this your management style?
Prudent SBA participating lenders will carefully track and refer to program literature needed to guide lending practices and remain compliant with the latest program requirements.
SBFI’s Study Hall tracks the most important SBA loan program guidelines and documents referenced in SBFI lender training programs, made available in one place for easy retrieval. These documents will be updated regularly as per program changes.
An explanation of the basic analysis of an operating company’s balance sheet & income statement, the tools for understanding a borrowing entity’s ability to repay its loans from cash.
Best practices for commercial lenders to set borrower equity requirements on business loans, and consider multiple application factors beyond only viewing collateral characteristics.
This course teaches lenders about the data behind credit scores, how to validate information and determine the credit worthiness of a business and its owner.
An explanation of the basic principles of business valuation, different approaches and definitions of value, and some best practices for lenders selecting appraiser and underwriting valuation reports.
Calculating cash flow with financial statements is limited credit analysis, but combining w/owner’s personal credit provides lender w/global view of their ability to repay proposed loan.
SOP 50 57 2 sets out the standard operating policies and procedures of the SBA for the administration of 7(a) Loans that have been fully disbursed and are in “regular servicing” and “liquidation” status.
In late 2015, the 504 debt refinance program was reauthorized and made permanent with statutory modifications, as part of Public Law 114-113, and will be known as the 504 Debt Refinancing Program.
A comprehensive collection of successive versions of the 7(a) and 504/CDC loan program’s Standard Operating Procedures (SOPs) since 2008 are provided below for the purpose of archiving the evolving rules. To track the exact revisions that occurred and when, we offer both the ‘final’ adopted version, as well as the ‘marked-up’ version, which highlights the intervening changes.
Participating SBA lenders can refer back to program guidelines in various periods, which might be important in subsequent years when determining the appropriate interpretation of previous decisions. SOP language that governs any particular loan would be the version in affect at the date the SBA Loan Authorization was issued.