Banks know the importance of a lending policy. When engaging in SBA lending the bank policies that apply to commercial lending do not always fit the criteria for SBA lending. SBA lending is not based on collateral, but solely based on cash flow and the ability of the business to repay the loan based on future earnings. For this reason alone, it is important for the bank to have a separate SBA loan policy.

Topics covered include:

• Establishment of standards and practices for SBA lending
• Discussion of SBA’s loan program requirements
• Benefits of incorporating an SBA loan policy into bank policy versus creation of a standalone SBA policy
• Incorporation of SBA’s statutes, regulations, and SOPs (Standard Operating Procedures)
• Minimum standards to include in the SBA loan policy
• Need to address underwriting standards, loan closing, servicing, 1502 reporting and liquidation procedures
• Discuss if the bank will have PLP status, or utilize the GP program
• Outline which SBA loan programs will be utilized by the bank