Keeping Up With SBA SOP Changes

It’s a bit of a rollercoaster, isn’t it? Trying to keep up with Notices and SBA SOP changes, that is.

And you’ve probably observed that updating your SBA program – revising checklists, replacing forms, adjusting procedures – isn’t quite as seamless as it could be. Every change has ripple effects – underwriting, closing, funding, servicing, documentation, and so on (and on!). Keeping up with those changes is an important part of maintaining SBA compliance.

It takes time to update procedures, and sometimes SBA moves faster than your update process can keep up with.

And then there’s the impact of habit. The “we’ve always done it this way” trap that even the most experienced members of your team can fall into.

Little inconsistencies add up over time, and don’t show up until it’s loan-review time.

Oops. And yikes. Because a single SBA policy change often touches multiple departments – that ripple effect we mentioned. 

Whether you’re managing changes internally or working with an SBA consultant, having a consistent process makes all the difference.

It’s Always a Process

Establish a repeatable process (and that means checklists too!) to evaluate what needs to happen. Consider every round of SBA SOP change as a project, not an announcement.

Ask:

• What changed, and what’s the effective date?

• Does the change affect our loan application package?

• Do interview questions need to be changed?

• Should the underwriting checklist be updated?

• How about the closing checklist – does it identify every newly-required document?

• Do any other checklists need updates?

• Are servicing procedures still accurate?

• Who needs to be notified in which departments, and has that been done?

• What about training – either new training requirements, or updates to existing training?

• What about loans already in process – are there document updates, new certifications, revisions to approvals?

• How about quality control – how will you verify that the changes are being followed?

Change is Hard

Especially when a particular process hasn’t been updated in some time, there’s likely to be a bit of a battle between ingrained habit and the new way of doing things. Tasks will probably take longer as people work to learn the new process. And some people may tend to be at least a little cranky!

It’s important to let people know why the change was made, and how the change impacts the end-to-end loan lifecycle, not just their piece of it. When someone in underwriting understands that the servicing team needs something new in order to remain in SBA compliance, they’re much more likely to adhere to the updated requirement because they know the impact to others on the team.

SBA Reality

SBA SOP changes and other SBA guidance will continue evolving; that’s a simple fact of life for SBA Lenders. Adapting doesn’t require a sizeable staff; it requires discipline in adhering to a defined process for reviewing changes, updating procedures, communicating expectations, and confirming implementation.

From the Loan Review Desk

At LRM Lender Consultants, when we conduct SBA loan reviews for our clients, we often note that mistakes aren’t about misunderstandings; they’re about different employees following different versions of a process. 

Fortunately, when procedures, checklists, and training stay aligned with the most-recent SBA guidance – through the process we describe here – loan files tell a more consistent (and generally more accurate!) story.

(FYI: this “from the loan review desk” section is a new feature we’ll be adding to some articles where it makes sense.)

Curious? Want help?

We’re here, as always, to help – whether that’s in conducting those SBA loan reviews working with your team as an SBA consultant to establish a structured way of addressing SBA SOP changes and maintaining SBA compliance. We also offer SBA Lender training to keep everyone on board and moving in the same direction. Give us a call at 877-576-0819, or drop us a line through our website here. We look forward to talking with you!