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CDC Gears Up First Mortgage Pooling Program To Increase Lending Capabilities for Banks. Source: Larry Nuffer, CDC Small Business Finance
Courses

Introduction to SBA 504

This one-day course gives anyone who is new to the SBA 504 loan program the foundation required for success. It is the prerequisite for all of  NADCO’s courses, and also stands alone for those individuals, such as board members, support staff or referral agents, who just need a general SBA 504 background.
Topics include:

  •    History of the 504 program
  •    Overview of the CDC industry
  •    Eligible and ineligible projects
  •    Financing structures
  •    Credit, collateral and character issues
  •    The process of getting a 504 loan funded
  •    Economic development criteria
  •    The advantages of a 504 loan

Prerequisite:     None

SBA 504 Marketing

This one-day course provides terrific 504 marketing ideas, tips and samples of effective marketing materials.
Topics include:

 

  •     Understanding the market—customers and referral sources (small businesses, banks, professionals, etc.)
  •     Understanding the ins and outs of 504: benefits and weaknesses from a sales perspective
  •     Understanding the competition—competing CDC’s and competing loan programs
  •     Direct and indirect marketing strategies
  •     Developing a database
  •     Developing a marketing plan
  •     Developing a SWOT analysis
  •     Selling 504

 Prerequisite:    "Introduction to SBA 504" or at least six-months’ experience with a CDC.

Legal Aspects of 504 Loan Servicing

This one-day legal course is for CDC attorneys, paralegals and staff who prepare the necessary legal documents for servicing actions that are reviewed and approved by SBA Counsel, as required by the SOP. Documentation for subordinations to refinanced or new Third Party Lender Loans, assumptions, releases and substitutions of collateral and obligors, deferments, changes to 504 Loan re-payment terms, and workouts will be reviewed.

Because many of these actions do not use SBA forms, the course manual and participants will provide sample forms and the class will use case studies to discuss the provisions that are typically needed. The course will also cover working with the Fresno and Little Rock Servicing Centers, SBA District Offices and Colson Services Corp. regarding legal documents.

Prerequisite:    None

Loan Servicing:  Basic

SBA’s 504 program regulations state, “The CDC must service the 504 loan in accordance with the Loan Authorization, these regulations, SBA policies and procedures, and prudent lending standards until paid in full.”

This one and one-half day course provides a comprehensive overview of all of a CDC’s servicing and portfolio management responsibilities, including monitoring the borrower’s financial condition and maintaining tax filings, insurance, and security and collateral filings.

Further topics include:

  •    Six keys to effective portfolio administration
  •    Fundamental servicing responsibilities
  •    Loan grading/classification
  •    Reporting requirements
  •    Routine servicing actions (including collateral release, assumptions)
  •    Review of SBA Servicing Center manuals
  •    Introduction to intensive servicing actions, delinquent and problem loans, collections and workouts (studies in-depth in "SBA 504 Portfolio Management - Advanced")

Prerequisite:    "Introduction to SBA 504" or six-months’ substantive experience with 504 lending.

Loan Servicing: Advanced

The ability to effectively manage complex portfolio issues extends far beyond the basic knowledge of policies and procedures and the ability to complete the right forms at the right time. Determining whether a borrower’s request to substitute collateral is in the best interests of the CDC and SBA can very well be a time-consuming, difficult task. Likewise, working with a borrower who has missed two consecutive 504 payments requires a compassionate, but realistic, approach to what could end up being a significant loss to the CDC and SBA.

This one and one-half day course provides an in-depth, analytical study of the three major areas of advanced portfolio issues: collateral actions, changes in ownership, and problem loans. There is heavy emphasis on casework, with many cases derived from experiences of CDCs across the country. Because the subsidy rate for SBA 504 is so closely tied to net recoveries on defaults, special attention will be given to the resolution of problem loans.

Topics include:

  •    Organizing a CDC to optimize the servicing function
  •    Servicing reporting systems that keep all parties informed
  •    Evaluating collateral release, substitution and subordination requests
  •    Evaluating requests for partial or complete changes of ownership
  •    Detecting a potential problem loan before it becomes a problem
  •    Balancing the interests of the borrower with those of the CDC/SBA
  •    Managing a defaulted loan from start to finish
  •    Preparing a Liquidation Recovery Plan (LRP)
  •    Working closely with Fresno/Little Rock Servicing Centers

Prerequisites:     At least 18 months’ experience in credit administration (loan approval or servicing) at a CDC or commercial lender. NADCO’s "504 Portfolio Management:  Basic" course is not a substitute for experience. Course participants should only be CDC employees who either are or will be heavily involved with advanced servicing functions, such as working with delinquent or defaulted borrowers, or evaluating (as opposed to simply processing) collateral change and change in ownership requests. 

504 Credit Analysis

This two and a half-day course focuses on understanding and analyzing financial statements. Extensive case study is an integral part of the "504 Credit Analysis" course.

Topics include:

  •    Organization of the financial statement
  •    Components of the balance sheet and income statement
  •    Components of the lending decision
  •    Analyzing financial statements, working capital needs, repayment ability and collateral adequacy
  •    Rules for SBA 504 lending and steps in the process
  •    Warning signals

Prerequisite:     "Introduction to SBA 504" or equivalent coursework or experience

504 Credit Analysis: Advanced

This advanced course provides a framework to examine a company’s cash flow and operations in depth, so you can make a sound underwriting decision.

Topics include:

  •   Uniform cash flow analysis (“UCA”)
  •   Break even analysis
  •   Analyzing projections
  •   Cash budgeting

Prerequisites:   "504 Credit Analysis" or equivalent coursework or experience (such as the NDC Credit Course), plus "Introduction to SBA 504"  and  "504 Loan Packaging", or equivalent field experience of at least six-months’ experience packaging 504 loans.

SBA 504 Loan Closing

This three-day course is a must for CDC staff and attorneys who are new to closing SBA 504 loans (or who need a refresher), as well as counsel who plan to participate in SBA’s Designated 504 Closing Counsel/Priority CDC program for expedited closings. It offers a complete review of the 504 closing process, from understanding the requirements of the SBA Authorization for Debenture Guarantee (SBA 504 Loan) to submitting a complete closing package to SBA’s District Office. Course content reflects changes per the statutes, regulations, SOPs, Notices and forms.

Topics include:

  •     Overview of 504 program (for attorneys)
  •     Types of borrowers, guarantors and ownership (for CDC staff)
  •     Authorization for Debenture Guarantee
  •     Preparation of core 504 loan documents
  •     Eligible Passive Company and multiple borrower 504 loans
  •     Interim and Permanent Prior Financing
  •     Real and Personal Property Collateral - Liens and Documentation
  •     Insurance (life, flood, and hazard)
  •     Environmental issues
  •     Use of Proceeds
  •     Debenture funding process
  •     Roles of CDC staff and attorneys in closing
  •     Practice Pointers: How to get the 504 loan to closing
  •     SBA’s Priority CDC Closing Program
  •     CDC Attorney Opinion Letter and CDC Certification

Prerequisite for CDC Staff:   CDC staff must have completed the "Introduction to SBA 504" course or have at least six months’ substantive experience with 504 lending.  There is no prerequisite for attorneys.**  

**  SBA is tracking the completion of education requirements by Designated 504 Closing Counsel, and NADCO reports to SBA the names of attorneys who attend and complete the "SBA 504 Loan Closing"  and "SBA 504 Loan Closing Update" courses.  Certificates of completion are only awarded to participants who attend the courses in their entirety. 

Attorneys seeking CLE credit for attending this course should contact their state bar association to determine their state bar’s requirements and then complete the application process through their state.

504 Loan Closing Update

This one-day course fulfills the once-every-other-year continuing education requirement for SBA Designated 504 Closing counsel. Non-designated closing attorneys and CDC staff who are interested in changes in the closing process are welcome to attend.   The course  includes a complete review of streamlined closing and changes to the Authorization Boilerplate.  Those who wish to become SBA Designated 504 Closing Counsel must also take the 3-day "504 Loan Closing Course".

Topics include:

  •     Changes in National Authorization Boilerplate
  •     Changes resulting from new legislation, regulations, SOPs & notices
  •     Changes to Forms
  •     Lease and occupancy requirements
  •     Errors that can delay funding
  •     Opinion letter for Multistate and LEA CDCs
  •     Open Roundtable Discussion of closing issues   

Prerequisite:    "Introduction to SBA 504"

504 Loan Packaging

This course - essential training for CDC loan officers - provides a thorough review of the loan application process, from the first meeting with the borrower through SBA approval. Case studies are used extensively.

Topics include:

  •     Economic development financing
  •     The roles of various 504 players
  •     Eligibility of the business and the project
  •     Creditworthiness
  •     Deal structuring
  •     Third party lenders
  •     The loan package
  •     SBA Form 1244, line-by-line
  •     Cash flow analysis
  •     The 504 Authorization and the Debenture Guaranty
  •     The loan officer’s report (SBA Form 1245)   
  •     The CDC and SBA approval process

Prerequisites:    "Introduction to SBA 504" or six-months’ experience in a substantive capacity (e.g., loan officer) for a CDC, plus "504 Credit Analysis" or equivalent coursework.  Basic understanding of SBA 504 loan program and credit analysis is required. 

504 Problem Loans, Workouts & Liquidation

This two-day course provides an in-depth study of the liquidation process for those who perform liquidation functions for any loan program, as well as those who are involved in 504 liquidation. Here’s what you need to know to take the lead in liquidations with limited SBA oversight.

Topics include:

  •     Liquidation philosophy and psychology
  •     SBA liquidation regulations, policies, procedures and forms
  •     Evaluating the loan (loan documents, lien position, collateral, acceleration, notice of default)
  •     Bankruptcy
  •     Preparing the liquidation plan including in-depth case studies
  •     Negotiation, litigation and judgments 
  •     CDC Liquidation Responsibilities
  •     Bidding Strategies at Foreclosure Sales
  •     CDC/SBA Liquidation Interaction

Prerequisite:    "Introduction to SBA 504" or six-months’ substantive experience with SBA 504 lending.


 

 
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