U.S. Small Business Administration Office of Capital Access May 2013
New leadership / organization / mission SBA s flagship job creator Recent changes / trends The proposed rule Maintaining the momentum Outline -1
2-1 Section 2
Draft, Deliberative & Confidential Office of Financial Assistance 504 Program Michael Simmons (A) Director Mary Frias Administrative Specialist 7(a) Branch Policy and Program Development *Vacant Supervisory Loan Specialist 504 Branch Linda Reilly Supervisory Financial Analyst Warren Boyd Financial Analyst Eric Wall Financial Analyst *Vacant Financial Analyst 2-2
2-3 OFA s mission is to expand small businesses prudent access to capital by constantly improving existing products and developing new ones to better meet the financing needs of small businesses. We will do this by providing exemplary customer service and practices that empower our internal and external partners to improve the effectiveness and impact of SBA products and services.
Provide policy training to OFO s approximately 300 Lender Relation Specialists Provide clear user-friendly policy for OFPO implementation. Coordinate with OCRM to help ensure proper balance of risk mitigation and program policy objectives Coordinate with OPSM to ensure: Ability to pull data to inform/measure loan policies Accuracy and clarity of SBA loan program web content Keep open dialogue with industry to obtain feedback useful for evaluating and improving policies. 2-4
3-1 Section 3
3-2 504 creates more jobs per approval
504 creates more jobs per dollars lent *A CDC in high job creation range 3-3
504 creates more jobs per $1,000,000 *A CDC in high job creation range 3-4
4-1 Section 4
504 Program loan volume increased 169% [FY 02 compared with FY 12] Average 504 loan size increased 58% [FY 02 compared with FY 12] Energy public policy [multiple loans to same borrower] Loan Closing Streamlining [expedited: 7, Regular: 12, CFR: 35] OCRM up and running strong Debt refi? New $5 million lending limit $5.5 million for energy/manufacturing 4-2
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The graph below depicts 504 activity for FY 12 and FY 13 through April of each FY. For FY 12, 504 Refi Activity is broken out to illustrate the amount of FY 12 activity accounted for by the program and to show the decrease in our monthly overall 504 lending as a result of not having the program this FY. As can be seen below, after the Refi program started to catch on we saw a dramatic increase in overall monthly 504 lending in FY 12. 4-4
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5-1 Section 5
Personal Resource Test (PRT) Affiliation (A) 9-Month Rule (9M) Board Requirements (B) 504 Program: SBA s Flagship Job Creator (PRT)(A)(9M) OCRM S.M.A.R.T. (B) Streamlining (B) OFA Mission: To expand small businesses prudent access to capital (PRT) (A) (9M) (B) 5-2
6-1 Section 6
Finalizing Proposed Rule Amending SOPs to reflect the Final Rule Training LRSs S.M.A.R.T. ramp up Continued dialogue with CDC industry Outreach to TPLs 6-2
7-1 Section 7
The agency had 1,961 Active TLPs from FY 12 Q2 FY 13 Q2 There were roughly 6K commercial lenders reported per FDIC 4 th quarter of 2012 70 35 27 185 16 30 151 28 30 127 81 15 31 70 36 152 72 80 2 78 48 98 31 50 45 27 40 29 23 10 10 61 90 181 15 86 69 58 22 8 36 105 19 32 48 10 41 12 136 10 12 1 3 7 7-2
The table below illustrates active lenders by region, analysis pertaining to top lenders within each region, and analysis pertaining to low activity lenders within each region As illustrated under the Top Lenders columns, activity in all regions is rather concentrated within the Top 20 lenders for each region The Low Activity Lenders column shows that a large percentage of lenders within each region are fairly non-active with three loans approved or less Note that analysis pertaining to FY 2013 correlates to activity through Q2 of FY 2013 Active Lenders by FY Top Lenders Low Activity Lenders Region FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 % of Activity under Top 20 Lenders (#) for FY 2013 % of Activity under Top 20 Lenders ($) for FY 2013 Number of Lenders with 3 Third Party Loans or Less for FY 2012 1 153 160 161 162 180 108 42% 60% 136 2 138 118 116 129 139 76 57% 75% 108 3 140 127 139 132 154 76 42% 67% 127 4 394 319 346 333 369 232 39% 49% 279 5 559 479 503 512 584 328 25% 39% 444 6 248 201 212 223 252 160 28% 41% 202 7 192 185 203 196 242 115 33% 59% 208 8 205 148 160 162 174 110 47% 58% 117 9 298 237 201 214 234 156 61% 68% 144 10 112 90 101 91 116 68 58% 68% 85 7-3
The top five states for Third Party Activity from FY 12 Q2 FY 13 Q2 by approved Third Party Dollars are listed in the table below with their activity figures These states represented 41% (#) and 46% ($) of all Third Party Activity for FY 2012 State Third Party Loans Third Party Dollars CA 1,708 $1,905,722,364 TX 512 $556,517,851 IL 510 $518,340,214 FL 659 $515,858,786 NY 296 $334,849,827 The top 10 lenders within these states from FY 12 Q2 FY 13 Q2 by Approved Third Party Dollars were (listed first from highest $) JP Chase, Bank of America, Bank of the West, Wells Fargo, OneWest Bank, Union Bank, Citibank, BBCN, City National Bank, and Zions First National Bank. These lenders represented 34% (#) and 35% ($) of activity within these states for FY 12 Q2 FY 13 Q2 There were 740 active Third Party Lenders within these states for FY 2012; the top 1.4% of lenders (i.e. the top 10 lenders) made up over a third of the activity 7-4