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How To Report SBA Loans to the
Debbie Golbach
Business Credit Reports
615-989-7005
How To Report SBA Loans to the
Commercial Credit Bureaus
[email protected]
Credit Reporting Requirements
Why now?
It's not new; precedent for federal agency accountability goes way back to It s not new; precedent for federal agency accountability goes way back to
•Budget and Accounting Procedures Act of 1950
• requires head of each agency to establish and maintain systems of internal control to safeguard assets
Jumping ahead just a tad … New in SBA policy
• SBA's SOP 50 57 7(a), effective March 1, 2013, makes it clear in Chapter 3, E. 2, page 28 and F. 2, page 29: "In accordance with the
Debt Collection Improvement Act of 1996, Lenders are required to report information to the appropriate credit reporting agencies whenever they extend credit via an SBA loan."
Credit Reporting Requirements
NOTjust an SBA requirement; required of ALLfederal credit programs, including loan guarantee programs -- “Agencies shall require lenders g g p g g q participating in Federal credit programs to provide information relating to the extension of credit to consumer or commercial credit reporting agencies, as appropriate.”
SBA lenders continue to have questions:
Who do I need to report to business credit bureaus? How often do I need to report to a business credit bureau?
Wh d I t?
Where do I report? What do I need to report?
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Not reporting SBA loans to the business credit bureaus on a quarterlybasis = out of compliance with the SOP
All SBA lenders required to report loans to at least one business credit bureaus on at least a quarterly basis throughout life of a loan Need to start reporting your SBA loans? Commercial credit bureaus:
Experian D&B Equifax Others?
What do some business credit bureaus require from lenders that can be problematic, particularly for lower volume lenders?
Credit Reporting Requirements
• Requiring a minimum number of loans to report • Requiring that ALL commercial loans be reported in
addition to SBA loans
• Requiring confusing agreements • Charging fees
Credit Reporting Requirements
So, what does BCR know about data reporting?
D t C t ib ti th bi t t f b i With t
Data Contribution = the biggest component of our business. Without companies & lenders sharing information, there would be NO credit reports!
Business Credit Reports is a gatewaybetween SBA lenders and the commercial credit reporting agencies. BCR gathers payment histories from lenders and submits the data in bulkto the three commercial credit reporting agencies, Experian, Equifax and D&B. p g g , p , q
BCR can help you report to Experian Equifax and D&B
Credit Reporting Requirements
BCR can help you report to Experian, Equifax and D&B free of charge. BCR meets all of the requirements for SBA loan credit reporting and is notsubject to minimums the way that individual lenders can be.
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Q: Does the SBA require SBA guaranteed loans to beQ: Does the SBA require SBA guaranteed loans to be reported to the credit bureaus?
A: Yes, the SBA requires all SBA loans to be reported to the business credit bureaus for the life of the loan.
Q: Will data reporting come up in a lender review? A: Yes.
Q: We have fewer than 100 7(a) loans. We called a business bureau directly and they said they can’t help us.
Credit Reporting Requirements FAQ
A: Business credit bureaus have minimums on the number of loans being reported. Each bureau has different thresholds, ranging between 250 and 500 loans. Those minimums do not apply when reporting through BCR.
Q: SBA requires us to report “at least” quarterly to at least one business credit reporting agency. BCR recommends monthly
Credit Reporting Requirements FAQ
reporting and to all business bureaus. Why?
A: It’s important to share borrowers’ payments with all business credit bureaus to ensure complete coverage. For example, your borrower goes into default on its SBA loan. As the reporting lender, you only report to Experian. Your borrower pursues a line of credit. A bank does their due diligence and pulls an Equifax report. Your SBA loan will not be visible on the Equifax report. Reporting your SBA and commercial loans to all business credit bureaus is advised
loans to all business credit bureaus is advised.
Q: Do each of the business credit bureaus require a separate agreement to start SBA loan reporting?
A: BCR provides you with everything you need to start reporting
Credit Reporting Requirements FAQ
A: BCR provides you with everything you need to start reporting to any or all business credit bureaus.
Q: Our bank’s core system is Fiserv / PCFS / Jack Henry. What process do we need to follow for the format? A: We can provide you with an easy to follow file layout.
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Q: Experian says that I must report on ALL of my accounts.Can I just report my SBA loans and not all of my loans? A: YES, through BCR you can report on just SBA loans. However, reporting your SBA and Commercial loans to all three business credit bureaus is advised.
Q: Will I receive a copy of the executed agreements for our records?
A: Of course.
Q: Does your company have standard language or wording available that we could incorporate into our loan documents
Credit Reporting Requirements FAQ
as notification of our reporting activity?
A: We recommend you check with your compliance department and / or legal department for specific language.
Q: We can’t put dollar amounts in the aging columns. Is there another way?
A: Yes, there is another way. You can use the status codes we provide
Q: How long does it take to set up the whole process? A: Once we receive the executed forms back from Experian and
Credit Reporting Requirements FAQ
have uploaded your loan file, the programming takes approximately 6-9 weeks.
Q: Can I change the layout of my file?
A: The Bureaus (Experian, Equifax and D&B) require that your loan file be in the exact same layout every month. The new layout will have to be programmed for their database.
Lenders are required to provide business credit bureaus with: • The borrowing company’s identifying information
Credit Reporting Requirements
• The Note Date • The Maturity Date • The Amount of the Loan
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Required Information - Standard Aging Format2 Layout Options 2 Layout Options
LOAN
_# NAME ADDRESS CITY ST ZIP CREDIT TIER OPEN DATECURRENT BALANCE 1-30 31-61 61-90 91+ CHG OFF AMT
CHG OFF
DATE Extract Date
7500000ABC, Inc.
1234 Main
Street Dallas TX 84062 NET 30 2/3/2010 $270,778.77 $3,500 $0.00 $0.00 $0.00 1/1/2015
7500002John Smith 300 Lake Drive Houston TX
8407
0 NET 30 1/25/2010 $227,588.88 $0.00 $2,770 $0.00 $0.00 1/1/2015
7500004Jane Smith
29585 River
Way San Antonio TX 84094 NET 30 3/4/2010 $94,034.41 $0.00 $0.00 $0.00 $0.00 1/1/2015
7500005
Disney Land Enterprises
, Inc. 4321 Mickey Mouse HighwayForest Park TX 84094 NET 30 4/26/2010 $387,464.31 $0.00 $0.00 $4,100 $0.00 1/1/2015
Required Information - Typical Lender Format
LOAN_
NBR NAME CONTACTINFO ADDRESS CITY STATE ZIPCODE NOTE_DATEMATUR_DATE BANK_BAL DAYSPASTDUE Statu s
CodePayment Amount Past Due Amount TOTAL_DUE CHARGE OFF AMOUNT CHAR GE OFF DATEExtract Date 12345 ABC, Inc. Bubba 1234 Main Street Somewhere CA 543217/14/2005 0307/31/2325090.69 4 1 9494 28482 9494 1/1/2015 56789 John Smith dba Boat City 300 Lake Drive Anywhere CA 567891/30/2005 0151/30/23673.41 0 C 1295 0 1/1/2015 98765 Jane Smith dba Boat Country 29585 River Way Anywhere CA 567898/18/2006 0168/20/213552.88 0 C 2312 0 1/1/2015 54321Disney Land Enterprises, Inc. Accounts Payable 4321 Mickey Mouse Highway Disney CA 9999920065/24/6/6/2031 76426.8 14 1 2135 2135 1/1/2015 11111 Lipo Clinic, Inc. Accounts Payable 9876 Very Thin Lane SkinnyCA 888883/15/2006 0154/18/29751.37 14 1 2396 2396 1/1/2015 2/2/2 2/2/20 23889 1/1/ 22222 Donald Duck, M.D. Daisy Duck 4567 Goofy Street Pluto CA 77777007/ / 17/ / .24 0 C 3034 0 2015/ /
STATUS CODES
CodeDefinition The diagram below lists the status codes for reports display in aplhaorder. Only one status code should be used per account C Current Account
1 1-30 days past due date Code Definition 2 31-60 days past due date C Current account 3 61-90 days past due 1 1-30 days past due 4 91-120 days past due date 2 31-60 days past due 5 121-150 days past due date 3 61-90 days past due 6 151-180 days past due 4 91-120 days past due
121-150 days past 7 181+ days past due 5 due
-No payment history available prior to this
time 6 151-180 days past due N No payment history available this month 7 181 + days past due 0 Zero balance and current account N No payment history availbale this month B Bankruptcy 0 Zero balance and current account G Collection B Bankruptcy L Uncollected/Charge-off G Collection K Repossession L Un-collected / Charge-off J Voluntary Surrender K Repossession H Foreclosure J Voluntary Surrender
The SBA Loan Reporting page on BCR’s website has more
Credit Reporting Requirements
The SBA Loan Reporting page on BCR s website has more information:
