EXPERT CREDIT RISK MANAGEMENT WITHIN FLAGSHIP LOAN PROGRAM

Small Business Administration

Challenge

The Small Business Administration’s (SBA) Office of Credit Risk Management (OCRM) oversees a multi-billion-dollar 7(a) loan portfolio that represents its largest and most popular loan program. Managing credit risk of the 7(a) Loan Program is of paramount importance to OCRM, which is charged with minimizing risk and financial loss to SBA.  To do this, OCRM selected Williams Adley to execute a robust and repeatable loan review program to assess Lender performance and compliance. Team Williams Adley was chosen for its expertise in commercial lending, and more specifically, its demonstrated knowledge of the unique requirements, eligibility, and risk drivers of the 7(a) program.   

Solution

To provide valuable data that OCRM uses to assess Lender non-compliance with 7(a) loan program requirements, and identify and analyze trends to better understand Lender and portfolio performance, Williams Adley:

  • Assembled a team with subject matter expertise in commercial lending, underwriting, and 7(a) loan program requirements with an emphasis on program eligibility, credit analysis, closing, and funding.

  • Developed a structure and repeatable loan review process capable of reviewing upwards of 2,000 loans annually in support of OCRM’s strategic plan.

  • Implemented and continues to operate three software systems that serve as: 1) a data warehouse, 2) loan review workpapers, and 3) a workflow management solution to assist with loan review execution, reporting, and tracking.

  • Annually delivers more than 300 loan review reports to Lenders and OCRM that outline loan review results for analysis and development of corrective action.

Impact

Williams Adley’s 7(a) loan review services bolster OCRM’s credit risk management program by providing quantitative and qualitative data for use in minimizing risk and financial loss to SBA. We deliver customized loan review results for each Lender that allow OCRM to assess performance and compliance at the Lender level and identify trends at the portfolio level.  We furnish useful and timely data to OCRM via spreadsheets and dashboards to enable more informed decisions on program policy.  Finally, Williams Adley provides customer service to the commercial lending community as part of the loan review process to foster understanding, cooperation, and efficiency, thereby instilling confidence in SBA’s flagship loan program.