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Best Practices in SBA Lending Staffing or Using an LSP

As mentioned in earlier blogs, there is a lot of SBA compliance that factors into a successful SBA lending platform. To maintain a consistent compliant process, it takes experienced SBA lenders, SBA credit analysts and SBA loan processors. While SBA lending has doubled over the past 5 years, the number of experienced SBA staff has not. Supply and demand have made SBA talent at least 25% more expensive than their counterparts in commercial lending.

So whether you are starting a new SBA lending program or simply wanting to expand and grow, it is a very real challenge to know how to approach staffing the SBA group.

There are thankfully two approaches. One is simply to pay market pricing for the SBA experience you need. Second is to utilize an LSP service.

One of the best things to come out of the great recession is the SBA assistance that is available through Loan Service Providers (LSP). These companies came together as a result of many highly valued and experienced SBA lenders being laid off during the recession. To keep busy, these SBA professionals came together to provide complete backroom support for SBA lenders who did not want to do many SBA loans or did not want to invest in hiring until loan production could support it.

Utilizing a qualified LSP while you ramp up production is actually a great strategy. It becomes a variable cost to processing SBA loans.

These are a full-service LSP’s providing support in determining eligibility, preparing credit memos for you to review and approve, submit applications to the SBA, assist in closing and funding, assist in selling the loan on the secondary market, and provide the 1502 monthly servicing report to the SBA. In addition, they will provide a number of significant and material benefits:

1. They are ready to get started immediately.

2. They provide meaningful training for your lenders and support staff at little to no charge.

3. They bring 50-plus years of experience.

4. They understand and will teach you SBA lending “best practices”.

5. They provide valuable mentoring at no charge.

6. As your SBA lending grows beyond $15mm in annual production, they equip the Bank to handle its own, in-house SBA department, effectively working themselves out of a job. You will benefit from “Best Practices” as you grow.

7. They assist with a seamless transition from an external to an internal department.

8. Transfer responsibility one job at a time. Take on credit then wait to transfer closing.

9. Have a quick question? How about answers at no additional charge.

10. They bring SBA compliance knowledge that is difficult to hire.

11. They seldom charge for the significant amount of work performed on deals that never close.

12. They get paid when the loan closes, motivating them to work in a diligent and timely manner.

13. They provide a variable cost structure; an advantage over the fixed overhead of an in-house team.

14. Seldom will you ever run across a deal type or problem that they have never seen.

15. You don’t worry about the bank competition stealing your newly trained people.

Obviously, the other choice is to hire. Finding the talent you need is a substantial challenge when you may not know much about SBA lending. You should never hire an SBA BDO who says he can build out a department. That is unless, he has done it before. So how do you know who is best to hire?

First, determine how much annual SBA lending you are wanting to pursue. It needs to be at least $10 to $15mm if you want full time staff to process, close and service. Here is my best recommendations on staffing needs based on loan production:

$5 to $15 million: One SBA loan producer and one experienced closing, funding and servicing processor.

$15 to $30 million: Most likely you will need three loan producers, two SBA credit analyst, 1 to 2 loan processors/closers and one loan portfolio servicer. You will also need one of the above people to be in charge of all SBA lending (a division manager).

$30 million and above: As you grow your lending, the worst thing you can do is to be understaffed and allow the credit approval and/or loan closing to drag out to extended time periods. This means understanding how many credit and how many closers are needed for specific levels of production. A lot of this has to do with the average size of the loans you want to do.

I would love to give you average pay for each position, but that has a lot to do with availability of experienced SBA staff in your market. What you pay for a credit analyst in Oklahoma City vs Atlanta, GA as an example, can be very different. My best advice is to work alongside an SBA consultant who can give you valued advice on staffing and save you a lot of money.

I spend time every month talking with lenders, helping them design their SBA lending program. Very seldom is there a financial charge for talking through this important issue. So when you are ready, let’s talk.

“The Top 5 Requirements to Starting or Expanding an SBA Lending Platform” written by Tim Terry, CEO of SBA Advisors.

Welcome to the SBAadvisors Blog!

Dec.

18^th

The Most Common Interview Question

By Tim Terry | Leave a Comment

“Tell me about yourself.”

It is the most common interview question, and one that a lot of job seekers find difficult to answer. Dana Manciagli provides valuable feedback in this article provided by Career Mojo through The Business Journals.

Question:

How do I answer this interview question: “Tell me about yourself”? I struggle with that.

Advice from Career Mojo:

I think you are in good company. Most people approach this in one of the following ways:

Babble on and on, hoping to say one or two things that interest the interviewer(s).

Do a résumé walk-through. This is incorrect because the interviewer didn’t say, “Walk me through your resume.” That’s a different question.

Stumble, hesitate and use too many filler words like “umm,” as if it’s the first time the question has ever been asked.

“Tell me about yourself” is concurrently one of the most common interview prompts and one of the most poorly answered. This question, along with others such as, “What are your strengths,” “what are your weaknesses,” etc., should all be scripted well before the interview…

For the complete article, How to answer the most common interview question, click here.

Welcome to the SBAadvisors Blog!

Nov.

24^th

How NOT To Get A Second Interview

By Tim Terry | Leave a Comment

Have you ever been confident in how things went in an interview, sure that you’d get a call back, but never did? Read this great article by Dana Manciagli about seven habits that kill your chances at getting a second interview.

So many of my clients and readers say, “I aced the interview, but I don’t know why I didn’t get a call for the next round.” Well, I guess you didn’t ace the interview, did you?

Sometimes you do well but they go with another candidate for a variety of other reasons. But having said that, it is also possible that you made some interview bloopers.

When you’re aiming to nail the big job interview, how you speak is as important as how you look. You’ve got the impressive résumé, solid references, and a professional outfit. But careless language could jeopardize your chance of landing that plum job.

Interview expert Darlene Price offers some insight about the seven common habits that can keep you from truly acing that interview:

1. Too much information

Avoid talking too much during the interview. In the business world, time is money. Bosses value employees who speak in a clear, concise manner. By all means, be interesting and use a personable enthusiastic voice, but avoid rambling. Get to the bottom line quickly.

As a general rule, keep your answers under two minutes. This habit not only shows you’re well prepared and succinct, it also allows time for the interviewer to ask more questions and get to know you better. …

Click here to read more.

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Jul.

23^rd

The Evolution of SBA Loan Service Providers

By Tim Terry | 6 Comments

Back in the early 90’s, I was teaching bankers how to do SBA lending. I also helped in doing credit analysis and loan packaging. Everyone called me a loan packager. As my business has evolved into setting up SBA departments and finding people to fill SBA jobs, so has the cottage industry that seeks to support small SBA lending programs.

Today we call this industry that of the SBA Loan Service Providers or LSP. They come in all skill sets. Some just do SBA loan packaging. Others focus on SBA credit analysis, etc. There are a few that are what we might call “full service”, proclaiming that they have the expertise to be your entire SBA back office. While it would serve the SBA lending community for the SBA to classify LSPs as “certified” according to their skills and abilities, it will be incumbent upon you to check them out. Significant due diligence is required. Many will say they are full service. However, there are just a few nationwide that this author would recognize and agree as having the full service skill sets required to fully protect the SBA guaranty.

The SBA has set up a policy in the SOP 50-105 (f) that regulates the fees that the LSPs can charge and there are caps. But, LSPs have been very creative as to how to get around this SOP policy and charge for “add on services”. Any LSP agreement must be sent to the SBA for approval by the bank and not the LSP.

Why has there been a rise in the number of and use of LSPs nationwide? The simple answers are, 1) the cost of hiring experienced SBA lending staff that know their job well enough to meet SBA compliance and protect the SBA guaranty, and 2) the lack of available SBA lending talent.

When the recession hit in October of 2008, I started receiving hundreds of resumes of SBA lenders who had lost their jobs. This continued throughout 2009. Many of these people had no choice but to move on to other careers, most often outside of banking. Significant hiring did not occur again until the second half of 2011. During the good lending years, the SBA industry has been good about bringing in new and younger people and training them. But during this recession, the industry simply did not replenish the pool. So, not only did we lose good people, but we did not replenish.

Once hiring began again, all lenders were focused on new loan growth. If the hiring manager were able to add to their team, it would have to be a seasoned professional who could “hit the ground running!” Some of the people who lost their jobs were able to come back into the industry. But, demand has outpaced supply and we have seen a major increase in compensation for these seasoned professionals. Starting an SBA department today, with a comprehensive backroom capable of doing in excess of $20 million in loan production, will cost the bank in excess of $600,000 start up first year including software, etc.

With the significant rise in secondary market premiums, along with flush banks that need loan growth, the SBA lending program has gained significant popularity unseen since the mid 90’s. Increases in SBA compliance have also risen to greater degree. The fear of losing the SBA guaranty is real. The mandate from the SBA is to do it right or do not do it at all.

How does a bank that wants to start an SBA program get started without the high cost of staffing, software and insuring compliance? Enter the rise of Loan Service Providers.

In the next part of this series I will discuss the people behind the LSPs. Who are they? Where did they come from and gain their SBA expertise? How do you complete due diligence on these support companies? And, most importantly, what are the pros and cons of using LSPs?

Welcome to the SBAadvisors Blog!

Jul.

16^th

Does your resume have what it takes to get you hired, Part V

By Tim Terry | Leave a Comment

Today we are wrapping up our series on resume writing. The past five posts we have discussed common ways resumes can easily work for or against you. We’ve covered everything from formatting, verbiage and keywords, to providing evidence of success and relocation. There is enough covered to ensure that the 15 seconds that a hiring manager spends reading your resume is enough to get you an interview.

Here are the last tips for this series that we have to offer you.

Leave out unnecessary details.

This is a very important part of editing and updating your resume. Focus on professional essentials that pertain to the position for which you are applying. Do not include hobbies, religious affiliation, and other unrelated personal facts on your resume. It’s essential to eliminate potential for pre-interview discrimination as well as maintain a high level of relevancy to the position and the organization.

It’s safe to assume that in applying for a high-level job you do not need to include entry- or low-level skills. A hiring manager would expect that a candidate would have considerable experience with Excel or Outlook, where as proficiency with field-specific software is much more significant and important.

Give enough information.

Your resume is intended to be a summary, not an entire life history. We mentioned in previous posts it should be a good outline for your interview and a marketing tool to promote you and your valuable skills. Allow room for discussion in your interview. Give enough information to qualify you, but not so much that there aren’t any questions when you meet. If your resume reads like a job description and can apply to anyone, it’s important to give more information about your history as it relates to you. Eliminate the generic details.

Thank you again for reading and keeping up with us. Continue checking in here, LinkedIn and on Twitter for updates and new blogs and series.

Welcome to the SBAadvisors Blog!

Jun.

26^th

Does your resume have what it takes to get you hired?, Part IV

By Tim Terry | Leave a Comment

In this installment of our resume series “Does your resume have what it takes to get you hired?” we are discussing the importance of focusing on your future and career potential in your resume. We also take a moment to discuss the importance and value of a summary or personal statement.

Focus on the future.

Tailor your resume to suit where you are headed. Stress the experience and achievements from past positions that show the hiring manager that you would be a good fit for the opportunity available, not just that you were good at what you once did. What does your past say about your potential?

While your work history plays a part in success, focusing too much on pass success can raise a red flag. Hiring managers want to know how you will be an asset to them in the future. How do your accomplishments influence the growth and development of the company and brand? Are you worth their investment? Focus on this especially in your resume’s summary, which is our next topic.

The summary, personal statement or “value proposition”.

This is where it’s imperative to use important key words. If the organization’s human resource department screens resumes before they go to the department manager, your summary must include the keywords and skills sets they are looking for.

The summary also serves to tell the interviewer or hiring manager who you are and what sets you apart from other potential candidates. What makes you different from other people with similar resumes and experience? This is a great place to identify what you can do for the company. However, it is important not to be redundant or repetitive. Write your career objective with the bank objectives in mind.

Thanks for reading part four of our series. We hope that you have been able to benefit from these last several posts. Next week’s post will be the last portion of this 5-week blog series and as always, feel free to reach out to us with questions or comments!

Welcome to the SBAadvisors Blog!

Jun.

11^th

Does your resume have what it takes to get you hired?, Part III

By Tim Terry | Leave a Comment

In our last couple of blog posts, we have been discussing ways to make your resume work on your behalf. If you have been keeping up with the series, we would love to hear your thoughts and answer any questions you might have. Feel free to comment on our blogs or e-mail us!

Today we are continuing the series on successful resume writing and covering relocation and leadership experience.

Relocation

If you are open to relocating, mention it in your summary, along with the cities or areas you are considering. This can help prevent your resume from being overlooked simply because of your current address. As mentioned in the last post, always provide your current and up to date contact information; it should not be hard to reach you.

Highlight leadership.

Showcasing your leadership experience, especially when in consideration for a management role, is vital to your resume helping you get an interview. Questions to think about when you’re summarizing your leadership in a particular position: How do you lead a team? What is your leadership style? How many people have you supervised? What success and growth has your leadership promoted? Have you served in upper-management roles?

Hiring managers want to know that you can successfully lead a team. Simply stating that you were credit manager isn’t enough. What have you done that sets you apart from other credit managers applying for the same position? How does your leadership experience align with the organization’s job description? If the hiring manager can pull useful information like this from your history in a quick scan of your resume, it is highly likely that the company will want to know more about you.

Stay Tuned!

Thank you for reading and keeping up with this series! We’ll be back next week with two more tips for using your resume to get you hired. We are here to help, so if you have any questions feel free to e-mail us or leave a comment below.

Welcome to the SBAadvisors Blog!

Jun.

02^nd

Does your resume have what it takes to get you hired?, Part II

By Tim Terry | Leave a Comment

In our first blog post of this series, “Does your resume have what it takes to get you hired?, we provided some tips that will make your resume work for you and keep you from getting overlooked. Your resume is often the first thing that human resources or hiring managers will see of you. It is often the easiest way to qualify or disqualify you in moving forward with the interview process. You can read the first installment of our resume series by clicking here.

Prove it.

Give information that provides evidence about your success. Give examples, be specific and steer clear from general, broad statements. For example, rather than stating that you are “goal-oriented”, mention that you contributed to a 20% increase in sales last year. It’s also important to address your leadership style and other major accomplishments in your work history. These are things that can put you ahead in the event that you aren’t the only candidate in consideration.

Providing testimonials is another great way to “prove it”. While reference calls are inevitable, quotes provided by your direct supervisors and colleagues can add a lot of value to your resume. Remember to keep it concise and neat; recommendations don’t have to be long or elaborate.

Provide accurate information.

Make sure your contact information is up to date and complete. It’s important that the hiring manager or human resources can reach you. If you are applying for a position out of state or long-distance, provide your current address and note that you’re open to relocating in your resume’s summary.

Don’t “dress up” your work history or responsibilities. These things will be found out one way or another and will end your resume in the “no” pile. As always, honesty is the best policy when it comes to your experience and skills. Interviews are meant to assess your potential for success at an organization- fibbing can cost you valuable time and opportunity. If there are gaps in your history, note why and include relevant volunteer or consulting work.

Thank you for reading and following us! We at SBA Advisors are here to help you and are available if you have any questions. Go to LinkedIn and Twitter to follow us for regular updates.

Welcome to the SBAadvisors Blog!

Apr.

29^th

Does your resume have what it takes to get you hired?, Part I

By Tim Terry | Leave a Comment

A professional resume is something that we all assume to have. We have listed our job history, a summary of accomplishments, and demonstrated growth in promotions and leadership positions. And yet, somehow great candidates can be overlooked simply because of their resumes. Do you know that the average time that a hiring manager spends first reading your resume is just 15 seconds? So it begs the question,

“Does your resume have what it takes to get you hired?”

Here are some tips direct from our 22 years of experience:

Make it easy to read.

Stay away from pre-formatted resume templates and use a font that is simple and traditional at least at a 12 font size. Highly stylized fonts can be difficult to read. Make good use of bullets, various font sizes for headings. If your list of achievements and responsibilities gets too long, use headings and bullet points to help organize them. Make sure it looks good digitally and printed.

Be concise by keeping paragraphs short, trying not to add unnecessary details. A one-page resume without any white space is difficult to read, as is a three-page resume without any substantial evidence of success. Don’t feel the need to keep your resume to one page, especially if you are a mid- to late-career professional. Your resume is meant to be a marketing tool, not a comprehensive career biography, and to give the hiring manager talking points to discuss with you in an interview.

Use their verbiage.

If the job description states that the company is looking for specific qualities or experience in candidates, work key words into your summary and history in context to confirm that you meet the qualifications required for the position.

Your resume should be in plain English but must also engage the reader to want to ask questions about you and how you might be a good fit. Tailor your resume to the position so that rhetoric doesn’t become a key reason why you aren’t considered for a position. Does your resume tell the hiring manager that you meet the skills and qualifications they need, or is it generic and uninspired?

Check back with us next week as we continue this series on resume writing. In the meantime, if you have any questions about how SBAadvisors can help you, feel free to contact us!

Additional Resources:

Korkki, P. “Write a Resume That Shouts ‘Hire Me’”. JobSeeker Weekly, June 18, 2013.

Krumrie, M. “Best Executive Resumes: An executive recruiter shares the secrets to success”. examiner.com, April 5, 2013, http://www.examiner.com/article/best-executive-resumes-an-executive-recruiter-shares-the-secrets-to-success

Goodman, D. “4 Quick Ways To Improve Your Executive Resume”. careerealism.com, http://www.careerealism.com/executive-resume-tips-quick/

Welcome to the SBAadvisors Blog!

Mar.

26^th

Are you overusing “buzzwords” on your resume?

By Tim Terry | 11 Comments

Some of the “power” words used on resumes have lost their power. Your resume can work on your behalf and in your favor or it can set you back. Check out this excerpt from an article in the Dallas Business Journal and see if you need to revamp your resume.

“Job seekers are overusing buzzwords and tired descriptors in the hope that they will magically get the attention of their audience.

I see them on résumés, hear them in networking meetings and interviews, and spot them in the all-important summary section on LinkedIn.

Career clichés are boring, uninspiring, and a turn-off.

Have you used any of the words on this list lately?

- Team player
- Results-driven
- Fire-in-the-belly
- Excellent leadership skills
- Great organizational skills
- Works well autonomously
- Self-starter
- Ability to prioritize
- Customer focused

The words themselves are not the problem — the problem is that they have no value when used alone. Comments like these in résumés are empty. They have no meaning, no credibility.

I have seen as many as 20 or more of these kinds of words listed at the top of a resume — in a candidate’s executive summary. It’s a waste of real estate on the page and can quickly get you tossed into the “no” pile.”

You can read the full article here: Career Mojo: Stop using these words on your resume!