Tip of the Week 

“Connecting the dots” in SBA Lending

Many of our lender clients have shared with us that their biggest challenge these days is what we like to call “connecting the dots”.  That is, having the ability to coordinate and control all the pieces of the puzzle – and do it in such a way that it doesn’t feel like micro management or overkill on communication (multiple emails or memos).

So here are a few things that we have found that can help in this regard, regardless if you’re a department of one or one hundred and one.

• First, have a system that works for you. This means effective policies and procedures that clarify what you’re doing and how and when it will be done, and by whom. In short, this is all about role clarity.
• Next, develop service standards and communication protocols. You and your fellow employees, and of course your clients, have the right to know when they can reasonably expect a response (even if it’s an update to say you don’t have their answer yet). No news is often construed as bad news during the loan process. Consider the “sundown rule” – all calls and emails returned before you leave the office, or sundown.
• Email is a great tool but it can be the bane of our existence too. Our metric for email is, if you’ve bounced back and forth more than 2 (or certainly 3 times) on an issue, pick up the phone and talk it through or leave a clear voice message.
• Never use email as a method of communicating strong emotion, especially anger or even frustration. Email is often tone deaf and your intended message will likely get scrambled.
• Over communicate. Think about those folks who may be off your radar but still integral to your process. For example, you may be on the origination side but what about your colleagues in servicing and workouts, remember that they need to be in the loop.
• Deal with good news fast, bad news faster. Never let a problem just stew in limbo. Deal with it now, think of it like a bush fire, left unattended it will only grow, possibly out of reasonable control.
• Document, document, document.  This mantra is said often in our bureaucratic environment of defending thought processes on loans made well past our memory stage.  Documentation is critical not only in defending oneself to SBA (at time of loan review or guaranty purchase), but also internally when we deal with team members trying to pull in the same direction.
• Make sure to organize the loan file in a fashion that is logical to the "SBA way".  One major frustration we see with many of our clients is when they are trying to assemble a guaranty purchase package or when they are trying to understand the convoluted nature of a borrower relationship (multiple loans products for different purposes) in order to make a decision or a case.

Communication, respect and organization are the bottom line keys to connecting the dots of SBA lending.

Take the right approach

Brian Burke and Karen McHugh