SBA Lender, Microloan Intermediary, and NTAP Reporting Requirements

OMB Control Number 3245-0365
Expiration Date XX/XX/XXXX

Certified Development Company
SMART Full Review Information Request
SBA 504 Loan Program Review
Attachment to Notice of Review
In accordance with 13 CFR §120.1000 (Risk-Based Lender Oversight) and 13 CFR §120.1050
(Reviews and Examinations), SBA conducts reviews of the SBA loan operations of SBA
Lenders. The information requested below assists in SBA’s evaluation of the Certified
Development Company’s (CDC’s) portfolio performance; SBA operations management; credit
administration; and, compliance with Loan Program Requirements. 1 Submission of this
information is required so that SBA can conduct that evaluation.
Instructions for the submission of requested information are in the attached cover letter.
**Please note, in general, for information that has already been provided by a CDC but is
unchanged, the CDC may certify that the information was already provided and is unchanged in
lieu of resubmitting the information. The certification that must accompany this document
submission must also state to whom and on what date the information was provided to SBA.
Please provide the following:
Management and Operations
1. Organization
a. Current organizational chart detailing the i) position, name and full-time, part-time
or intern designation of each CDC staff member including management, and ii) the
month/year that Executive Director began leading the CDC.
b. Summary of delegations and responsibilities for the executives and program
managers of the SBA 504 program. List any significant changes regarding CDC
delegations, authorities, responsibilities, and structure since the CDC’s last Annual
Report.
c. Please complete the following Composition Matrix based upon the CDCs current
Board of Directors.

1

Information requested may be applicable to the evaluation of more than one area.

PLEASE NOTE: You are not required to respond to any collection of information unless it displays a currently valid OMB Approval number. The
number for this collection of formation is 3245-0365. The total estimated time to respond to this collection of information, including gathering
and maintaining the data needed, and completing and reviewing the collection of information, is 4200 minutes. You may send comments or
questions regarding this estimated time or any other aspect of this collection of information including suggestions for reducing the time or
other burden to: Director, Records Management Division, 409 Third Street, S.W., Washington D. C. 20416, and Desk Officer for the Small
Business Administration, Office of Management and Budget, New Executive Office Building, Room 10202, Washington DC 20503.

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Financial Risk Management
Corporate Governance
Legal Issues Relating to
Commercial Lending
Internal Controls

Workforce, Community or
Economic Dev.

Commercial Lending

Loan

Contact Information

Audit

City and State
of Employment

Executive

Company
and Title

Voting

Name
No City and State
.
of Residence
1
2
3
4
5
6
7
8
9
10

Director’s Background
& Expertise

# of Years on the Board*

Directors and Loan Committee Members
Role & Committee Membership

* Enter “N/A” if individual is not a board member.

d. Detail the changes to the Board’s composition since the CDC’s last Annual Report
submission and include the corresponding effective dates of all changes and the
Board minutes that evidence approval of each change.
e. Current curriculum vitae for Board members.
f. For any Directors who serve on other Boards, please respond to each of the
following requests:
i. Name of the business that the other Board governs;
ii. The type of business and services offered by the business that the other
Board governs;
iii. Note if the business that the other Board governs is civic, charitable or
comparable organization; and
iv. Note if the business that the other Board governs is active in financial
services, economic development or making loans.
g. Updates or changes to any Board Members’ compensation since submission with
the most recent Annual Report. Describe who receives compensation, the form
and amount of the compensation, and for what they are being compensated.
h. If the CDC has a Loan Committee (LC); please respond to each of the following
requests:

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i.

Please provide the procedure by which the LC member recuses himself to
avoid any conflict of interest vote, such as being an employee of a third
party lender bank who is affiliated with the subject loan package being
reviewed.
ii.
Please indicate the city of each LC members’ home and work, if not
submitted with the last Annual Report.
2. Business Plans
a. The CDC’s Capital Plan detailing actions to raise additional capital, if needed, and
the Board meeting minutes documenting discussions and approval of this capital
plan.
b. The CDC’s current written Investment Policy that includes the requirements for
the quality of investments, counterparty risk assessments, Board oversight, and
reporting.
c. The CDC’s written plan or policy to mitigate the risk of deposits exceeding
insurance limits.
d. The CDC’s Executive Director Succession Plan and evidence of Board approval.
3. Financial Information
a. The CDC’s last fiscal year-end audited/reviewed financial statements that have
been issued since the CDC last submitted its Annual Report; and, date of the Board
of Director (Board) meeting minutes in which the financials were presented,
discussed and approved, and breakout of 504 Revenue by Processing Fees,
Servicing Fees and Float Interest revenue. If the CDC is operating as a Multi-State
CDC, provide a separate accounting of each state of all 504 fee income and
expenses and evidence that all funds resulting from its Multi-State CDC operations
are being invested in economic development activities in each state in which they
were generated.
b. Interim financial statement (balance sheet and income statement) as of the most
recent quarter-end.
c. A list of the CDC’s deposit institutions, and the average balance by institution in
the previous 12 months
d. The amount of the CDC’s reserves for future operations as of the i) last two fiscalyear ends and, ii) the current quarter. Please provide the line item descriptions that
were used in calculating these totals.
e. List the report names/frequency that provide the necessary information for the
Board to maintain its awareness of and direction over the 504 Loan Program and
CDC operations.
f. Strategic and current operating plans, budgets and comparative performance
reports related to the SBA program objectives for portfolio growth, performance,
product lines, and geographic and industry (i.e., NAICS) concentrations, and the
Board meeting minutes documenting discussions and approval of
strategic/operating plans.
g. List any inter-CDC affiliations between Board members and CDC staff members.
This would include such relationships as a close relative, spouse, parent, child, or
sibling that works for the CDC.

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h. Updates or changes to the CDC’s Articles of Incorporation and signed bylaws, if
not submitted with the last Annual Report.
i. The CDC’s current: a) written Executive Compensation policy, b) Executive
Director’s compensation package that details the base salary, benefits, and if
applicable, the bonus structure, if not submitted with the Annual Report. Please
provide the Board meeting minutes documenting Board approval of the
compensation package and the Board’s annual performance review of the
Executive Director. (If minutes have been previously provided, please indicate the
date of Board approval.) Has the CDC conducted a review of executive
compensation at peer organizations? If so, please provide a copy of the review.
j. Any other final or, if the report has not been finalized, draft reports received within
the last two years relating to your SBA lending program resulting from:
i. Internal audits, examinations, reviews and management letters;
ii. External audits, examinations, reviews and management letters; and
iii. Management’s response and a summary of actions taken to address the
findings and recommendations of each audit, examination, and review.
Include Board of Directors meeting minutes documenting discussion and
decisions made about corrective actions.
k. Most recent audit Engagement Letter from CPA Firm, if not submitted with most
recent Annual Report.
l. Evidence that CPA Firm and appointed individual are licensed to practice as public
accountants in the CDC’s principal office location.
m. Please provide the Board meeting minutes documenting CPA Firm
discussing/presenting the most recent audit results to the CDCs Board. (If minutes
have been previously provided, please indicate the date of Board approval.)
n. Evidence of CPA Firm’s letter to CDC management on internal control
weaknesses, if not submitted with most recent Annual Report.
Eligibility and Credit Administration
1. Final or draft Independent Loan Review reports provided to the CDC since the last report
was submitted with the Annual Report: a) date of the Board meeting minutes that
evidence its review of the Independent Loan Review report b) date of the Board meeting
minutes which evidence its approval to conduct the Independent Loan Reviews; and c)
copy of an executed agreement for the next Independent Loan Review and the dates
scheduled, if one is pending.
2. Detail the CDC’s practices for evaluating continued creditworthiness (e.g., annual
financial statement analysis, credit modeling for portfolio management purposes, etc.). If
borrowers do not submit their annual financial statements after repeated attempts by the
CDC, what additional steps are taken to evaluate continued creditworthiness? Please
identify the location (page number) in the CDC’s Servicing Policy documenting the
CDC’s policy for this effort.
3. Loan Policy and Procedures Manual and Loan Servicing Policies and Procedures Manual,
including meeting minutes documenting the Board’s last review/approval of the policies.
Please identify the page(s) in the CDC’s written Loan Policy that details the required
abstention procedure.
4. Description of the internal and/or external credit evaluation methodology employed,
including credit scoring techniques utilized to:
a. Screen or evaluate for loan approval; and,

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b. Risk rate existing loans.
5. Please describe your department structure/function for ongoing servicing and for
liquidation activities.
6. What is your business model for resolutions (liquidations/purchase requests)?
a. Is it centralized or decentralized? Please explain.
b. Are SBA liquidations managed by a “special assets” department? If not, how do
you ensure SBA requirements are met?
7. List of Designated Attorneys, including contact information, name of state licensed,
training certificate, and professional liability insurance policy binder that specifies the
attorney’s name as being covered in the policy.
Compliance with Loan Program Requirements
1. Please complete the table below regarding SBA Training by listing all SBA-specific (do
not list non-SBA loan program sessions) training for the last two years for all staff
including the Executive Director, name of session, and month/year attended. Please also
indicate who conducted the trainings and by what means (e.g., webinar, District Office
classroom session, NADCO conference session, etc.). Add lines as needed.
Staff/Executive
Director Name

Title

SBA Loan
Program
Training
Session
Attended

Month/Year
of
Attendance

Training Conducted
By

2. If the CDC has fewer than nine (9) voting directors on its Board, please provide
documentation supporting the SBA’s waiver of this requirement.
3. Documentation supporting the submission of Statements of Personal History Forms (SBA
Forms 1081) and fingerprint cards (FD 258) to the District Office for new officers,
directors, and employees, over the last three years. In addition, if the CDC's address or
phone number has changed within the past three years, please provide transmittal
correspondence evidencing submission to the District Office.
4. Minutes of all Board, Executive and Loan Committee meetings as applicable, for the last
24 months if not submitted with the most recent Annual Report, including evidence that:
i) any affiliated Board and Committee members (i.e. third-party lender) abstained from
voting where a potential or actual conflict existed, ii) there was a quorum of at least five
members voting on all loan approval decisions, and iii) at least two of the members
voting on all loans had a background in commercial lending.
5. List all loans that were provided to CDC associates, the loan date, rate and terms,
amount, and their relationship to the CDC.
6. The CDC’s a) written Conflict of Interest Policy, and b) the Board meeting minutes
documenting its approval.

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7. Internal Control Policy (including Independent Loan Review Policy and Risk Rating
system) with the date of the meeting minutes documenting the Board’s last
review/approval of the policies.
8. Evidence that Quarterly Delinquency Reports were submitted to the SBA Loan Servicing
Center for the last three quarters.
9. A list of all current ongoing litigations, claims, commitments, or contingencies which
may impact the CDC’s balance sheet, ratios, or loan covenants.
10. The most recent two years of IRS Form 990 tax returns, if not submitted with most recent
Annual Report.
11. Any renewals, updates or changes to Directors’ and Officers’ liability insurance policy
since the CDC’s submission with the last Annual Report with all endorsements.
12. Any renewals, updates or changes to Errors and Omissions liability insurance policy
since the CDC’s submission with the last Annual Report.
13. The Board-approved budget for investment in other economic development in each of the
states in the CDC’s Areas of Operation for the CDC’s current and prior fiscal years
(pursuant to 13 CFR 120.823(d)(10)).
14. The report used by CDC management/Board to monitor its investment in other local
economic development, including: i) activities with descriptions, ii) amount invested
and/or service hours in each of the Board-approved activities, iii) the CDC’s analysis of
the impact that the investment had on the community, and iv) evidence of Board
approval. Please explain if there were no investments made. This should also include
CDC’s dollar amount invested in other local economic development activity for the latest
two completed fiscal years.
15. The written policy and narrative describing any relationships with and monitoring of
commissioned non-employees or any other type of non-employee, loan application
agents, brokers or similar individuals.
16. List of all executed Professional Service Contracts, along with date of SBA’s preapproval. Provide the a) month/year that the Professional Service Provider first began
providing services to the CDC, and b) Board minutes that evidence its most recent
approval of the current contract.
17. Is the CDC a Lender Service Provider for any 7(a) lender? If so, please provide a list of
all loans packaged in the last 12 months.
Portfolio Performance
1. List of all 504 loans in an Excel spreadsheet with SBA loan number, loan balance,
delivery method (regular, 504 Debt-Refi, ALP or PCLP), borrower’s name, current
status of each loan (approved pending funding, current, in catch-up, in deferment, past
due [please note number of months past due], purchased by SBA in liquidation,
purchased by SBA but returned to servicing, purchased by SBA and charged-off by SBA,
or paid in full), paid through date, the name of the agent/broker associated with the loan
(if applicable), the third party lender, and the name of the CDC’s business development
officer (BDO) responsible for the loan, the current loan classification (risk rating), and
date of last risk rating classification. For charged-off loans, please only include those
loans charged-off in the past five years.

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PCLP
Latest quarterly PCLP Loan Loss Reserve Fund Report, if applicable, with evidence that it was
submitted to the SBA District Office.
Discussion of higher risk metrics as listed below.
[Insert list of SMART metrics to be discussed]