SBA Requires Quarterly Reporting
If you’re not reporting you may have an SBA guarantee issue!
For over a year, the Small Business Administration has required that all SBA loans are to be reported to the commercial credit bureaus on a quarterly basis. The updated Standard Operating Procedure 50 57 effective March 1, 2013 says, “Lenders are required to report information to the appropriate credit reporting agencies whenever they extend credit via an SBA loan. Thereafter, they should continue to routinely report information concerning servicing, liquidation, and charge-off activities throughout the life-cycle of the loan.”
Our friends at the National Association of Government Guaranteed Lenders (NAGGL) have provided some additional insights and clarifications released by federal agencies on the topic since the SOP update was implemented.
While most SBA lenders are generally familiar with the need to report debt collection and charge-off, it is clear that lenders now need to report during loan servicing too. Furthermore, both current and delinquent accounts are to be reported.
How does the SBA plan to enforce these requirements? NAGGL advises lenders to assume that it will become a factor in lender oversight reviews, as well as guarantee purchase review. However, as a new requirement, there is no basis on which to determine exactly how oversight might be implemented.
If you care to study the matter yourself, we suggest the following resources:
The best practice is to report loan payment experiences on all accounts, regardless of any Federal guarantee. Lenders who report their payment data get paid better. Advising your customers that their payment performance is being reported provides you leverage to get paid on time. By reporting good payment behavior, you’re helping your “good” customers to build their credit record, which enables them to grow their business.
NAGGL suggests strongly that lenders ensure that applicants understand that payment and loan status information will be reported on a quarterly basis to a commercial credit bureau.
BCR can help you report your data to all three of the big business credit bureaus - D&B, Experian and Equifax. It’s easy and it’s FREE. Visit our Data Reporting page to learn more.
Still have questions? Please contact our in house SBA expert Debbie Golbach at 615-989-7005 or by email Debbie@businesscreditreports.com.