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Office of Performance Management and Chief Financial Officer | Resources

Office of Financial Analysis and Modeling

Summary of Responsibilities   

The primary responsibility of the Office of Financial Analysis and Modeling  is ensuring that tasks related to subsidy modeling and the computation of subsidy rates for credit programs are in compliance with the Federal Credit Reform Act of 1990 (FCRA) and all related directives and guidance. The FCRA requires all credit agencies, including the SBA, to budget and account for the cost of credit programs by determining the net present value of cash flows to and from the Government over the life of the portfolio and ex press ing the net amount as a credit subsidy rate. The process to develop a subsidy rate is lengthy and complex, requiring unique data collection techniques and analysis efforts. SBA develops its subsidy rates by creating models that incorporate data on loan maturity, borrowers' interest rates, fees, grace periods, interest subsidies, delinquencies, purchases or defaults, recoveries, prepayments, advances and borrower characteristics.

The Office of Financial Analysis and Modeling analyzes loan performance data and determines the subsidy costs of SBA's loan programs. This information is collected for inclusion in the President’s Budget and supports other Agency operations. These efforts include, but are not limited to, the following:

  • Establishing, reviewing and analyzing cash flow estimates to calculate subsidy rates for Federal Credit Reform loan programs;
  • Developing and implementing new analytical approaches to enhance the Agency's budgeting process;
  • Analyzing the impact of various legislative proposals on the cost of providing small business and disaster loans;
  • Analyzing the budget and financial impact of initiatives such as asset sales, potential new programs and program changes;
  • Participating in the ongoing development and enhancement of reporting for Credit Reform loan programs; and
  • Maintaining databases of credit program information required for budgeting, financial planning and management purposes.