10 tips to prepare for a
Successful Independent SBA Loan Review
By Leslie Tripp Director of SBA Consulting , Financial Institutions Group
While Small Business Administration ( SBA ) loans bring added value to your institution and its customers / members , they don ’ t come without added risk . By assessing credit risk levels and evaluating risk management processes , an independent loan review serves as an essential function in minimizing risk while ensuring internal controls are adequate . Whether you conduct your review internally or leverage an external reviewer , it ’ s critical to prepare in advance so your institution is positioned for a successful review . Consider these 10 helpful tips when you start preparing for your next review process .
1 . Ensure your documents are readily identifiable . Assemble your loans into a 10-Tab or a similarly organized format where all documents are readily identifiable . When the SBA performs a review , they send out a Loan File Document Checklist to assist in assembling the loan files selected for their audit . You may want to consider leveraging this format for your loan files .
2 . Verify only the most recent , signed documents are in the folder . Remove duplicate documents of the same form ( s ). All documents should be final , executed and signed .
3 . Organize servicing documents . If servicing your loan file is part of the review , ensure all related documents , notes and emails to borrowers are documented in the file . This includes documentation of your institution ’ s attempts to follow-up on documents .
4 . Prepare documentation for servicing requirements residing in a separate system . This includes documents such as proof of continuing insurance coverage ( s ), payment of real estate taxes , uniform commercial code ( UCC ) continuations , etc .
4 VIEWpoint Issue 1 | 2023