Such a dreaded word in the world of SBA lending!
They always come at the most inopportune time, are a total surprise because you swore it was a complete package, and / or overwhelm you with the amount of information requested.
They are never a picnic.
Here are some quick best practices to help you and your staff address them efficiently and with as little stress as possible.
First, breathe! Most screenouts come with a turnaround-time expectation in the three-to-five business day range. Take advantage of that time. There’s no need for a knee-jerk response that could lead to more problems down the road.
Track responsibilities. As a person who loves paper, I print a copy, sit down with my team, and read the items out loud. In the margins, I write who’s responsible for the documentation needed to address each item.
Understand the questions! In the round-table with your team, discuss the meaning behind the item. For example: “documentation of the source of injection.” Be sure your team knows what documentation meets that requirement before sending them off to locate it.
Already answered? SBA isn’t perfect and will often request items you’ve already provided. It’s easy to get annoyed, but it serves no purpose to respond with, “We sent it already!” Just send it again with a simple, “As provided in our previous correspondence, please see the attached [item requested] for your review.”
Submit a complete response. Don’t respond in a piecemeal fashion. That just leads to a lot of back and forth and wastes everyone’s time. Appoint a team member as the collector of all requested information. Once they have all the items or justifications, they can draft the response and send everything at once.
Format the response. Use a simple letter format stating the loan number, loan name, date of SBA’s request, and your response to each item, with a brief description of what you’re providing. Be sure to use their same numbering order to prevent confusion.
Keep copies! Put a copy of the response letter and attachments, along with the original Screenout, in your file to ensure everyone has access to the information for future communications with the SBA.
Need more time? If you need additional time, respond with a request for more time and provide a date by which you believe you can respond, along with reasons for the extra time needed. The most-common reason right now is “we’re short-staffed due to COVID.”
Whether the Screenout is at origination, servicing, purchase, or charge off, it just takes a breath and a plan to set everything in order.