2014 Fall Training Course Descriptions
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.
History of the 504 program
Overview of the CDC industry
Eligible and ineligible projects
Credit, collateral and character issues
The process of getting a 504 loan funded
Economic development criteria
The advantages of a 504 loan
OCRM: Impact of Current Changes & Preparedness
“Change” is the constant in today’s SBA 504 lending world and your CDC needs to be prepared for its next SBA OCRM review or ALP designation renewal. OCRM reviews are not what they used to be in providing SBA with oversight of CDCs.
This one day course is a “must” for the CDC Manager, Board of Directors, and staff responsible for compliance. CDCs who have upcoming or potential SBA OCRM reviews on the horizon and ALP designation renewals coming due in the next 6 months should attend. Real time updates and recently announced changes to OCRM review processes will be included. Designed to be interactive, participants are encouraged to ask questions throughout the course. You are aware of the “who” and the “what”. Participate and you will learn the “where”, the “when”, the “how”, and the “why”. BE PROACTIVE, Not Reactive! Sign up for this course and learn how to prepare your CDC for the next OCRM review, BEFORE you receive the initial notice of review or ALP renewal letter.
Remote Reviews vs Targeted Review vs Full On-Site Reviews
OCRM Risk Based Review Process Changes Including “SMART”
Components of the “SMART” CDC Profile Assessment
“Legacy” vs “Emerging” Loan Portfolio
Loan File Review Requirements
The Importance of Risk Rating Your CDC Loan Portfolio
Internal Control Discussions
Changes to CDC Organizational Requirements
OCRM Review Ratings
Frequent Review Findings
Current SBA/OIG “Hot Button” Issues
Best Practices to Implement NOW
Liquidation & Post Debenture Workouts
This 2-day course begins with the debenture purchase and does not include servicing. New and for the first time added to this course, in-depth discussions of SBA responses to NADCO’s very detailed list submitted to SBA concerning questions and clarifications from the new servicing/liquidation SOP 50 55 and how those answers will affect your liquidation activities.
Discussion of SBA’s updated Servicing and Liquidation Matrix; post-debenture workout/modifications and their accounting; the complexities of note and loan sales, short sales, assignment of loan documents back to a CDC; and litigation from a liquidation point of view. Also, what SBA expects from a CDC as it relates liquidation and litigation activities from a regular CDC, an ACL CDC, to a PCLP CDC. The course will include in-depth discussions of the new SBA guidelines concerning the timing parameters of liquidation and how they affect liquidation. Guidance and discussion of documents needed for short sale and compromises as well as other liquidation/litigation actions is also included. Class participants are encouraged to bring (or submit to NADCO beforehand) unusual or complicated liquidation cases for class discussion.
"Introduction to SBA 504" or six-months’ substantive experience with SBA 504 lending.
Credit Risk Institute
The innovative NADCO Credit Risk Institute will give new and experienced CDC credit analysts the “tools” needed to effectively analyze small business financial statements and underwrite SBA 504 loans. The Institute begins with an introduction to financial statements, needed for new analysts, and will progressively take students through the principles and concepts contained in the NADCO Credit Risk Institute Credit Analysis Model. These principles will be reinforced by intensive case studies. Upon successful completion of the Institute Course work, CDC analysts will receive the NADCO Credit Risk Institute Certification.
The Institute will be structured as follows:
Online Class: Introduction to Financial Statements
Online Class: Accounting Principles for Credit Analysts
Online Class: Cash Flow Analysis using Tax Returns
Pre-Course Case Study
Four-day Class Session:
Online Class Review
Pre-Course Case Study
The Credit Risk Institute Credit Analysis Model (illustrated using the Pre-Course Case):
Prescreening Loan Applications
Income Statement Analysis (Ratio, Trend, and Industry Analysis)
Balance Sheet Analysis (Ratio, Trend, and Industry Analysis)
The Operating Cycle
Cash Flow Analysis (“Traditional” and “Indirect” Cash Flow)
Personal cash flow analysis
Global Cash Flow Analysis (Business and Personal)
Start Up and High Growth analysis (Cash budgeting and Projection Analysis)
Make your decision (How to write a good credit memorandum)
Case Studies (applying the 504 Credit Analysis Model)
Manufacturing and/or wholesale
Service business and/or professional
Multiple Operating Companies
Experienced CDC analysts may begin participation on day three and still receive the certification, provided they successfully complete the final exam.
504 Loan Closing
This two-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. This case-study focused course will cover the basics as well as practice tips related to the SBA Authorization for Debenture Guarantee (SBA 504 Loan) as well as submitting a complete closing package to SBA’s District Office. The course developed and offered by NADCO’s Attorney Advisory Council. Further information will be offered soon.
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 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.
Economic development financing
The roles of various 504 players
Eligibility of the business and the project
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
"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.
Basic Servicing and Portfolio Management
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 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.
Six keys to effective portfolio administration
Fundamental servicing responsibilities
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 (Loan Servicing) - Advanced]
Participants must have completed Introduction to SBA 504 or must have at least six month's substantive experience with 504 lending.
Advanced Servicing and Portfolio Management
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 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.
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
Completion of NADCO’s Basic Portfolio Management AND at least 6 months experience in a CDC. NADCO's basic servicing course is not a substitute for experience. Course participants should only include those 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.