I know many of you have had SBA 7a customers calling and asking for loan deferments. Below is a guide of how to document your loan file.
Step 1
Have the borrower fill out this PDF. File on their requested deferment.
Step 2
Make sure you have a recent income statement and balance sheet (or current tax returns) for the business and all principals. If your personal financial statements are older than one year request an updated one.
Step 3
Write a short memo (can be a Word document) to the file indicating the bank is doing a 90 day deferment and the reason for the deferment. Complete a short cash flow analysis based on your updated financial information.
Step 4
Have the borrower sign a modification form to defer the payments similar to what you would use on a regular commercial loan.
Step 5
If the loan IS SOLD in the secondary market
You will need to notify Colson Services Corporation at info@colsonservices.com Let them know the payment dates you are deferring. In the subject line put the SBA loan number and the name of the borrower. Put a copy of this email in your file. You cannot do the deferment until you have Colson approval. Once you have Colson approval, send a copy of the Colson approval email, a copy of the signed modification, and your short memo to lrsc.servicing@sba.gov.
If the loan is not sold in the secondary market
Send a copy of the signed modification, and your short memo to lrsc.servicing@sba.gov .
Step 6
Colson 1502 reporting: Once step 5 is completed, you will need to change the SBA status code for the months you are deferring to a status code 4.
Important!
Remember, you are only deferring payments not moving the maturity date.Your loan will continue to accrue interest, this is not be capitalized on the loan. You will need to reamortize their loan when the deferment period is up. This will cause their payment to INCREASE! Depending on the size of the loan, it may take a while for them to catch up on the accrued interest.
*If you have questions do not hesitate to contact me at rob@sbaworks.com or lowerym@sbaworks.com