The Lender's Advantage Newsletter - June 2013

Newsletter Date: June, 2013

 

Small Business Week Celebrations - June 2013

SBA has designated the month of June as the time to celebrate its Small Business Award winners.  The West Texas District Office participated in several small business award celebrations this month throughout its four major market areas:  Abilene, Amarillo, Midland/Odessa, and Lubbock.  The details are listed below:

Abilene

An awards luncheon was held in Abilene on June 11, 2013 to recognize Samuel (Sammy) Garcia as the Minority Small Business Champion of the Year.  Sammy is the owner of Samuel Garcia State Farm Insurance Agency.  The SBA West Texas District Gold Star Champions for 2013 were:  Contracting Champion - Ronald G. Miller, Director, Business Operations of 7CONS/CD; SBA Champion - Judy Wilhelm, Director of the Small Business Development Center - Abilene; Lending Champion - First Bank Texas, SSB; and Lending Champion - First Financial Bank, N.A.  First Bank Texas, SSB was recognized as the Top Volume SBA 7(a) lender for the Abilene market.  Council Finance was honored as the Top Volume SBA 504 lender for the Abilene market.

Amarillo

An awards luncheon was held in Perryton on June 19, 2013 to honor Casey and Brandi Cowan of Watonga Cheese Factory as the 2013 Small Business Person of the Year (District Wide).  That luncheon also recognized the Perryton Community Development Corporation as the Financial Services Champion of the Year. PJ Pronger, Director of the West Texas A&M Small Business Development Center, received the SBA Champion 2013 Star Award for the Amarillo market.  First United Bank was recognized as the Top Volume SBA 7(a) lender for the Amarillo market.  Texas Panhandle Regional Development Corporation was honored as the Top Volume SBA 504 lender for the Amarillo market.

Midland/Odessa

An awards luncheon was held in Odessa on June 25, 2013 to honor Tamera Bavousett of Compass Pediatrics as the 2013 Midland/Odessa Area Small Business Person of the Year. The event also recognized Lawanna Smith of L'oven Bakery Expressions as the 2013 Women in Business Champion of the Year. Enrique Romero, Director of the University of Texas - Permian Basin Small Business Development Center, received the SBA Champion 2013 Star Award for the Midland/Odessa market. A separate event will be held later this year to honor our Top Volume SBA 7(a) and 504 lenders.

Lubbock

An awards luncheon was held in Lubbock on June 27, 2013 to recognize Susan DeVore, owner of Diamontrigue, as the 2013 Lubbock Area Small Business Person of the Year.  First Bank & Trust Company was honored as the Top Volume SBA 7(a) lender for the Lubbock market.  Capital Certified Development Corporation was recognized as the Top Volume SBA 504 lender for the West Texas District Office.  SBA Region VI - Regional Administrator, Ms. Yolanda Olivarez, provided the Keynote Address at the luncheon.

Rates

Effective March 20, 2013, The Office of Financial Assistance announced the 3rd Quarter "Peg" Rate and Maximum Interest Rate of a Third Party Lender Loan for a 504 Project. Click here to view SBA Information Notice 5000-1271.

Current Lender Activity Report

The May 2013 SBA Lending Activity Report is now available.  Click here to review the report.

West Texas District Office - Most Active SBA Lenders & Micro-Lenders

Do you want to find out which lenders and certified development companies are making the most SBA loans in this District?  Click here for detailed information regarding our most active participants in the SBA Loan Programs.

Lender Relations Hot Topics

Revised SBA Form 912 - Statement of Personal History

SBA Information Notice 2000-833 details recent changes to SBA Form 912 - Statement of Personal History, which is used to determine citizenship and character issues for various applicants for SBA assistance.  This updated form became effective on May 1, 2013, and, since the previous form has expired and is no longer valid, the new form is to be used on all transactions or applications requiring SBA Form 912.

The major revisions to the form centered around questions 7, 8, and 9.  After consulting with program offices, it was collectively determined that the following three questions adequately address the Agency’s needs in determining character issues:

7. Are you presently subject to an indictment, criminal information, arraignment, or other means by which formal criminal charges are brought in any jurisdiction?

8. Have you been arrested in the past six months for any criminal offense?

9. For any criminal offense – other than a minor vehicle violation – have you ever: 1) been convicted; 2) plead guilty; 3) plead nolo contendere; 4) been placed on pretrial diversion; or 5) been placed on any form of parole or probation (including probation before judgment).

To view SBA Information Notice 2000-833 in its entirety, please click here.  To view the revised SBA Form 912 - Statement of Personal History, please click here.

New SBA Servicing & Liquidation Actions 7(a) Lender Matrix

After loan proceeds are disbursed, 7(a) loans made in the West Texas District Office are serviced at the Little Rock Servicing Center (LRSC) located in Little Rock, Arkansas.  The document entitled, “Servicing & Liquidation Actions 7(a) Lender Matrix” gives guidance to lenders in servicing 7(a) loan guaranties.  The “Servicing & Liquidation Actions 7(a) Lender Matrix” dated 08-16-10, Version 8 has been replaced by a newer version dated 04-30-13, Version 9.  The Matrix guides lenders about what actions fall under their unilateral authority and what actions require either notice to SBA or SBA approval.  If the lender is required to give SBA notice, the lender will either use E-Tran or Form 2237.  The Matrix indicates the different actions where E-Tran can be utilized.  In addition, please be aware of the footnotes denoted on certain servicing and liquidation actions.  For instance, when the lender transfers a loan into liquidation, footnote number 7 advises, “Lender should use SBA Form 1502 to transfer loans to liquidation status and report loans as PIF prior to Guaranty Purchase”.  Page three of The Matrix advises lenders of the different links that they should use to direct their actions, requests, and questions.  Click here for the new Servicing & Liquidation Actions 7(a) Lender Matrix.  

For additional information on this topic or questions regarding loan servicing, liquidation, or guaranty purchases, please call Roger Henderson, LRS/Brand Manager at 806-472-7462, Extension 107 or by email at roger.henderson@sba.gov

SBA's Restrictions on Preferences

SBA Standard Operating Procedures (SOP) 5010 5(E) pages 10-12 lists the following restrictions on conveying preferences:

1) A lender may not take any action in connection with an SBA-guaranteed loan that establishes a preference in favor of the lender. The lender must be particularly careful to avoid establishing a preference when using its delegated authority (for example, reducing its existing exposure to the borrower through the use of an SBA guaranteed loan).

2) A lender must not take any side collateral or guaranty that would secure only its own interest in a loan; obtain a separate guaranty on the unguaranteed portion of the 7(a) loan without SBA’s approval, such as through a co-guaranty program or arrangement;

(3) A lender may not require a borrower to purchase certificates of deposit or maintain a compensating balance not under the control of the borrower;

(4) A lender may not take a side loan which would have the effect of ensuring a risk-free or limited-risk investment on the participant’s share; or have an SBA-guaranteed loan in a "piggyback" structure. Piggyback financing occurs when one or more lenders provide more than one loan to a single borrower at or about the same time, financing the same or similar purpose, and where the SBA-guaranteed loan is secured with a junior lien position or no lien position on the collateral securing the non-guaranteed loan(s). SBA does not consider a scenario where both loans are for working capital and the non-SBA guaranteed loan is secured only by working capital assets to be a piggyback structure. SBA does not consider a shared lien position with the lender (pari passu) as a piggyback structure.

(5) Under the following circumstances, a lender may make a side loan to purchase stock of the participant (as may be required by certain lenders such as Farm Credit Administration entities):

(a) The enabling authority of the lender requires the purchase as a condition for making the loan.

(b) The lender makes a separate side loan not guaranteed by SBA for the borrower to buy the stock or debentures. The side loan must be subordinated to the SBA loan, but the lender may hold a first lien on any stock collateralizing the side loan.

(c) The interest to be charged on the side loan must not exceed the maximum rate of interest acceptable for SBA-guaranteed loans, and the maturity of the side loan must not be less than that of the SBA-guaranteed loan.

(d) In the event of default, either on the side loan or the SBA-guaranteed loan, the lender may not take any action to collect or liquidate the side loan, except canceling or retiring the stock securing the side loan, until the SBA loan has been fully liquidated.

For additional information on this topic, please contact Derenda Fisher, Lender Relations Specialist at 806-472-7462, Extension 123 or by email at derenda.fisher@sba.gov

Lender Roundtable - Perryton, Texas - Tuesday, July 2, 2013

The West Texas District Office would like to invite all lenders in Perryton and surrounding communities to attend an SBA Lender Roundtable meeting that will be held at Pizza Duo on Tuesday, July 2, 2013, from 11:30 A.M. to 1:00 P.M.  Lenders will have the opportunity to network and receive the latest updates on the SBA loan programs.  Pizza Duo is located at 321 S. Main Street in Perryton, Texas.  This event is being sponsored by the Perryton Community Development Corporation. Lunch will be provided.  If you are interested in attending this event, please contact Derenda Fisher at 806-472-7462, Extension 123 or by email at derenda.fisher@sba.gov

SBA Opportunities Workshop - Wednesday, July 31, 2013

The Texas Tech University Small Business Development Center (SBDC) in Lubbock will host the SBA Opportunities Workshop on Wednesday, July 31, 2013, from 6 P.M. to 8 P.M.  The SBDC's address is 2579 S. Loop 289 in Lubbock.  Small business owners will have the opportunity to learn more about the SBA loan programs and to learn about the services provided by the Small Business Development Center.  Be sure to register for this event, please contact Elaine Melot at 806-745-1637 or by email at:  e.melot@ttusbdc.org

Training Calendar

We are currently in the process of establishing our lender training calendar for the rest of 2013.  Our Lender Relations team can provide the training at your bank location or at our Lubbock District Office.  Training is available in the following topics:  Updates on the new SOP 50 10 5(E), SBA Loan Programs, Purchasing & Liquidation or other topics.  To set up and lock in your training date, please contact the following individuals:   Armando Garcia, Lead Lender Relations Specialist at 806-472-7462 ext. 104/armando.garcia@sba.gov; Roger Henderson at 806-472-7462 ext. 107/ roger.henderson@sba.gov or Derenda Fisher at 806-472-7462 ext. 123/derenda.fisher@sba.gov

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