Pub. 3 2013-2014 Issue 5

20 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S In its ongoing initiative to make this pro- cess easier for lenders, the SBA provides the Servicing & Liquidation Actions 7(a) Lender Matrix as a guide for actions needing SBA approval and those you can take under Uni- lateral Authority. Importantly, you need to document, document, document! The SBA makes it clear in the Matrix: “…When taking action that falls within a lender’s unilateral authority, the lender is encouraged to notate the loan file with a state- ment such as, “This action was taken under unilateral authority.’” We recommend going a step further. Al- ways – always – put a hard copy of the Lender Matrix current to when you make a decision under Unilateral Authority in the loan file along with your internal documentation. “Current” is the operative word. Unilateral Authority can change over time and if your bank ever needs to ask the SBA to repurchase the guaranty of a loan in liquidation, you then have documentation to support your authority to make any changes in servicing/ liquidating the loan. Here’s a working example from the Lender Matrix. Let’s use the action, “Change interest rate prior to initial disbursement.” Under the Unilateral Action header there is an X in the E-Tran column. Therefore, under Unilateral Authority, the lender can make this decision and submit the change to SBA through E- Tran. In this case, your bank should put this documentation in the loan file: • Copy of the Lender Matrix that is cur- rent as of the date the change is made; • Screen capture of the change being made in E-Tran; • Any other documentation to reflect internal approval for the change, e.g. amended credit memo, or change- in-terms if the bank had already documented the loan previous to the change. Working with loans that are in need of servicing or liquidation actions can be a very detailed process, and the SBA lender needs to make sure they are following the steps outlined in the Lender Matrix from the SBA. If you need assistance in understanding the Lender Matrix, or help determining if your loan portfolio has properly been maintained in accordance with the Lender Matrix and thereby protecting your SBA guaranty, please contact Vern Hansen at vern@jrbrunoassoc.com or 720-663-8431. n Vern Hansen http://www.jrbrunoassoc.com/about/team. html heads the Colorado office of J.R. Bruno & Associates, a leading nationwide consulting firm to SBA and business lenders. He brings 40 years of banking and commercial lending experience to J.R. Bruno, and has served in ex- ecutive positions including president and executive vice president-chief lending officer at several regional and community banks. FEATURE ARTICLE “…When taking action that falls within a lender’s unilateral authority, the lender is encouraged to notate the loan file with a statement such as, “This action was taken under unilateral authority.’” VERN HANSEN J.R. BRUNO& ASSOCIATES A s a lender, handling a loan in ser - vicing or liquidation is one of the last things you want to do. How- ever, it does happen; and what you thought was a good deal has now gone sour. SBA Loans: Servicing and Liquidation Unilateral Authority— Going a Step Beyond