Form 1502 Commonly Asked Questions

The Form 1502 report can represent a maze of "what if's" that for even the most experienced SBA lender can represent a tangle of intimidation. These are some of the questions that they may ask themselves on a regular basis (monthly):

• If the borrower makes a late payment, when should we send the ongoing servicing fee?
• How do we report the guaranteed portion interest if a rate change affected this month's payment?
• If a loan is undisbursed, when must we report that loan on the Form 1502?
• How do we document revolving lines of credit? What if multiple advances and/or repayments are made within one reporting period? What information is required and how is it reported?
• How should a loan be reported that shows paid-in-full in the current month?

If lenders are wondering what the answers are to questions such as these, you can be sure that the 1502 reports being submitted monthly are not reconciling to what the lender and the SBA have on record as the outstanding balance of the loan. One area where this will be a constant frustration (where the rubber meets the road) is when the lender submits a guaranty purchase request to the National Guaranty Purchase Center (Herndon). The required transcript of account submitted at that time will be compared to what has been provided on-going to Colson during the life of the loan via the 1502 monthly information. This can be a frustrating exercise with SBA to get the information "reconciled" to their satisfaction (time wasted when trying to work with SBA on a guaranty purchase). After all, you're just trying to get paid at that point, who wants to quibble over these kinds of details?

For a quick reference to answers to these questions and more, please access our resource document, Form 1502 Commonly Asked Questions, with a Special Access subscription.

Colson has put forth a good effort in trying to assist lenders with this time consuming and burdensome activity(it becomes more so as the loan volume increases). Are you aware that Colson has offered up several solutions to mitigate the "agony"? There are actually eight solutions:

1. Borrower & Loan Accounting Performed by Colson (borrower remits payment directly to Colson)
2. Loan Accounting Performed by Colson (lender collects payment but remits 100% to Colson to distribute fund to appropriate parties)
3. Template to Perform Calculations & to File Electronically (Excel spreadsheet with built in calculations)
4. 1502 Submission Through the Internet (lender inputs information directly into 1502 web site which will perform calculations)
5. Assistance with Determination of Guaranteed Portions (Colson supplies electronic file)
6. Receive Information on 100% Portions of Loans (for lenders with unsold loans not subject to fees)
7. Calculation & Payment of SBA's Fee in Advance for Term Loans (payment of lender servicing fee annually)
8. Calculation & Payment of SBA's Fee in Advance for Revolving Loans (payment of lender servicing fee in advance).

For more detailed explanation of how each of these Solutions work, feel free to download the descriptions, Form 1502 Submission Solutions, in our Free Resources. Several of these Solutions come with a required fee, but many of them are free of charge.

Also, if you need technical assistance on this topic (training, Lifeline assistance, design of job aides/resources customized to your specific needs, etc.), please consider us your point of contact. We stand ready to assist you in your daily effort to deal with SBA regulations. Call us for a free telephone consultation to determine how we may best address your needs.

Take the Right Approach.
Karen McHugh and Brian Burke
972.301.4601

 

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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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