The loan authorization should be prepared as soon as possible after SBA loan approval, with subsequent modifications to be documented as memos to the file that become a part of the loan authorization (as an appendix). Any changes to the loan authorization should be initialed by the lender and the borrower and attached to the original loan authorization.
It is surprising to us how many times we can go into a lender's shop to conduct an on-site loan review and find how difficult it is to actually locate this very important document. It should be right on TOP for easy access, not only for reviewers (SBA and outside reviewers like us), but for your portfolio manager people responsible for knowing how to properly service the loan as mandated by SBA requirements. There should be no digging for the loan authorization in the voluminous SBA loan file - have a good system.
Also, make sure you are using the latest (most up to date) version of the boilerplate (SBA makes changes regularly and the loan authorization boilerplate language "trumps" outdated SOP, Policy Notice and SBA forms language). Click here for the latest version (as of today) located on our website.
Lastly, don't change anything! In the boilerplate - pick only what is available to you (to remain in compliance). PLP lenders may develop Authorization conditions that are not pre-approved in the boilerplate and use them without prior SBA approval, PROVIDED they are only used ONE TIME. Whenever a PLP lender develops and uses a non-standard condition, an explanation for its development must be in the loan file.
Systems are important to have so everyone in your SBA department (and your internal clients) is singing out of the same songbook. Handoffs between roles (efficiency), file organization (consistency), communication of changes in rules and regulations (compliance) are all areas where we at sbaAccess can help you build a better platform. Put us on your TEAM wherever we could be a good fit - either a short end project (to write, review, or simply help you organize your SBA policy and procedures) or with an ongoing Lifeline for technical assistance as you need it. Let us know how we can help. Visit us at www.sbaAccess.com.
Take the Right Approach.
Karen McHugh and Brian Burke
SBA Access ©2009 - All Rights Reserved
All content is copyrighted and unauthorized use is strictly prohibited. If you would like to quote any part of this text, email bburke@sbaaccess.com or kmchugh@sbaaccess.com for permission.
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