February 18, 2020

The Three P’s of Developing an SBA Lending Strategy Part Three: Your SBA Lending Team

This post is part three of a four-part series on developing an SBA lending strategy. 

The core element of success of any goal is the people. No matter how big or small your institution, having the right people in the right positions can make or break your SBA lending initiative.  As we mentioned in our first post in this series, you can choose to leverage either an in-house team or outsource many of the roles, or even implement a hybrid approach that uses both. In any case, there are key roles that must be filled. 

Key Roles in an SBA Loan Department

There are several key roles in an SBA Loan department. Some of them can be filled by the same individual, while others may require different people in order to get the right mix of skill and personality to excel in that role. Those roles are:

  • Business Development Officer: The Business Development Officer’s main function is to generate leads and manage the overall client relationship. They are the first to establish borrower expectations and work in tandem with the rest of the team to manage the borrower’s expectations throughout the loan process.
  • Eligibility Determination & Loan Structure: This role is the essential first step in the due diligence and compliance process, as they verify that the borrower, business, and use of proceeds meet the requirements of the SBA loan program before beginning the formal loan process.
  • Document Collection/Processing: This role is critical in collecting the supporting documentation required by both the lender and the SBA and verifying the documentation for accuracy and compliance.
  • Underwriting: The underwriter develops the credit memo in accordance with both bank and SBA loan standards and submits the package for SBA review and approval.
  • Closing: The Closing position helps pull together the final loan package and works closely with an experienced attorney, the in-house team, and the borrower and any other necessary parties to secure and execute the final loan agreement.
  • Servicing: This position manages the ongoing servicing of the loan including securing updated loan documents and filing necessary reports, like the 1502, with the SBA.

Each role is unique and comes with its own sets of demands, challenges, and requirements for success. Your lender service provider can help you develop descriptions, requirements, and standards for each role so you can begin assessing potential candidates to serve in your SBA department. 

Personality and Fit in the SBA Department

As mentioned earlier, it’s important to put the right people in the right roles. Just like having a vacancy can impact the success of your SBA program, so can putting the wrong person in the wrong position. The right fit is a function of competency, skill, experience, and personality. The qualities that make a great Business Development Officer are not the same qualities that make someone a diligent Closing Officer. In addition to having well defined job requirements and standards in place, it also helps to leverage proven assessments such as the MBTI Personality Assessments, also known as Myers-Briggs, which can help determine if a candidate possesses the right traits for the role in addition to their experience and skills. 

Because there is a shortage of specialized SBA staff in the industry, you may need to utilize external resources to fill all or a few of the roles, especially as you begin building your SBA loan program. Many lender service providers, like Capital Growth Solutions, offer customizable back office loan support as well as consulting to help you develop and implement your SBA lending initiative. This allows you to compete with “the big guys” without making a hefty initial investment in staffing and internal resources. 

In our next installment of this series, we will explore the essential process and subprocesses of a sound SBA lending initiative. 

About Chuck Evans, CEO

Chuck has 30 years in commercial banking and economic development lending. Prior to joining Capital Growth Solutions, he was President, CEO and Co-Founder of PrudentLenders, LLC. after having previously served as Managing Director for Pennsylvania’s largest Certified Development Company: South Eastern Economic Development Company. Chuck has been an active supporter of small business and an active participant in the industry associations, National Association of Certified Development Companies (“NADCO”) and National Association of Government Guaranteed Lenders (“NAGGL”).

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