SBA Lender, Microloan Intermediary, and NTAP Reporting Requirements

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

Certified Development Company
SMART Analytical 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 information 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 1560 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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Directors and Loan Committee Members
Role & Committee Membership

Corporate Governance
Legal Issues Relating to
Commercial Lending
Internal Controls

Workforce, Community or
Economic Dev.
Financial Risk Management

Commercial Lending

Loan

Audit

Contact Information

Executive

City and State
of Employment

Voting

Company
and Title

# of Years on the Board*

Name
No City and State
of Residence
.

Director’s Background
& Expertise

1
2
3
4
5
6
7
8
9
10

* 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:
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,

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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
fiscal- year 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.
h. Updates or changes to the CDC’s Articles of Incorporation and signed bylaws,
if not submitted with the 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 reports have 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

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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,
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 SBAspecific (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.

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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 last 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.
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

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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.
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]