Ruth Lee, CMB

Implication of SBA’s New Equity Injection Policy The recent revision to Chapter 25 of the SBA's SOP introduces a significant change in how lenders must document equity injections for SBA-guaranteed loans. What Changed? Previous Policy: Lenders were required to document equity injections based on their standard practices for similarly-sized, non-SBA guaranteed commercial loans. Failure to do so raised a rebuttable presumption that an early default was due to the absence of the required equity injection, potentially justifying a full denial of the SBA guaranty. Updated Policy: Now, lenders must document equity injections as specified in the Loan Authorization, ETRAN Terms and Conditions, or other loan documents. Failure to properly document these injections still raises a rebuttable presumption that an early default was caused by the absence of the required equity injection, justifying a full denial of the SBA guaranty. To rebut this presumption, lenders must provide credible evidence that the primary cause of the borrower's default was something other than the lack of the required equity injection, such as the death of an irreplaceable key employee or an uninsured natural disaster that destroyed the borrower's business premises and customer base. Implications: • Standardization: The change moves away from relying on a lender's internal practices, instead standardizing documentation requirements across all lenders. • Compliance: Lenders must now strictly adhere to the specific documentation requirements outlined in the loan's official documents, ensuring that equity injections are properly verified and recorded. • Risk Management: Proper documentation is crucial, as failure to comply can lead to the SBA denying liability on its guaranty in the event of an early default

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Some 11th-hour changes to the SOP update last month could have big impacts on #SBAlending. The update removes the requirement for IRS-verified tax transcripts when a "No Record Found" response is issued. Hansen Rada breaks down why responsible lenders are still choosing to verify. 👇 #SBALending #DueDiligence #FraudPrevention #TaxData #LenderInsights

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"If we bring in commercial lending infrastructure, will it work with our existing systems?" This is the first question most Community Financial Institutions ask. Smart question. The wrong approach is infrastructure that requires you to: - Replace your core system - Rebuild all your existing processes - Retrain your entire team on completely new workflows - Operate in disconnected silos The right approach is infrastructure that integrates with what you already have. What Integration Actually Means: System Integration Your existing core banking system stays. Your current platforms stay. Your familiar tools stay. Infrastructure should connect TO your systems, not replace them. Data flows where it needs to go. Teams work in familiar environments. Nothing gets ripped out and rebuilt. Workflow Integration Your team shouldn't have to abandon everything they know. Good infrastructure adapts to your institution: - Customized workflows that match your approval process - Reporting that delivers what leadership actually needs - Documentation that aligns with your existing standards Team Integration Your internal team doesn't disappear. They stay involved in: - Relationship management - Final approvals - Client communication - Strategic decisions What changes: They're not buried in manual processing anymore. The Onboarding Reality: Week 1-2: Discovery - Understand your current workflows - Map your approval processes - Identify integration points - Define success metrics Week 3-4: Configuration - Set up institution-specific workflows - Configure reporting - Connect systems - Prepare documentation Week 5-6: Training - Train your team on new workflows - Practice with test scenarios - Answer questions - Build confidence Week 7-8: Launch - Process first loans through new infrastructure - Monitor closely - Adjust as needed - Support your team This isn't theoretical. Institutions with different cores, different sizes, different processes have all integrated infrastructure successfully. Because the right infrastructure is designed to adapt, not to force you into a one-size-fits-all approach. What Your Team Experiences: Before: Manual everything, constant context-switching, overwhelmed During Integration: Training, questions answered, gradual transition After: Clarity, efficiency, confidence The transition isn't about abandoning what works. It's about removing what doesn't. The Real Integration Challenge: The technical integration isn't the hard part. The hard part is mindset. Shifting from "we have to build everything ourselves" to "we can bring in proven infrastructure." Institutions that make this shift successfully don't do it because they've given up control. They do it because they've realized infrastructure isn't the core competency they need to build internally. Your core competency is serving your clients. Infrastructure should enable that, not distract from it.

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Is your institution using relationships in lending decisions intentionally or unconsciously? Our new blog post offers practical resources to help make well-informed, intentional lending decisions. We’ve developed a Character & Relationship Assessment Review Tool and a Sample Policy Template that lenders can adapt to their own context. These tools are designed to help structure relationship-based practices in ways that expand opportunity instead of reinforcing bias. 🔗 Download the tools and explore best practices for relationship-based lending here: https://bit.ly/46oxqzv #FinancialJustice #UnderwritingForRacialJustice #FairFinance

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Unlocking the Mid-Year 2025’s Commercial Lending Trends – Insights & Webinar Recording Now Available Are you ready to navigate the shifting landscape of commercial lending? In our recent webinar, "The State of Commercial Lending Mid-year Review," we shared insights into the elements that are shaping C&I loan growth, pricing, and risk. Key highlights include: -Why 83% of banks are planning to expand their commercial loan portfolios despite economic uncertainty. -How healthcare and professional services are driving unexpected growth in small business lending. -The impact of tariffs and trade policy on loan demand, and what it means for your strategy. -Practical ways to stay competitive as spreads tighten and fee income declines. -Tools to benchmark your pricing and uncover hidden opportunities for margin improvement. Don't miss out on learning more! Watch the recording of our recent webinar to gain valuable insights into the current trends in commercial lending. https://lnkd.in/gb7wSGJx

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We’re excited to announce the expanded Data Partner Dashboard for community banks and credit unions! The Data Partner Dashboard levels the playing field for community banks and credit unions by providing the visibility and self-service tools they need to bring their trusted member experience into the digital age, keeping account connections strong and digital experiences seamless and secure. Here’s what’s included: 🔗 Enable smoother, more reliable member connections to apps and services 📊 Monitor and manage your connection health to the Plaid network 🎨 Ensure logos, names, and URLs are up to date across Plaid-powered apps Learn more: 👉 https://lnkd.in/eUkx_iRU

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Real-time cash flow data? Already in our toolbox. GDS Link is now part of Plaid's partner ecosystem—bringing direct access to real-time cash flow insights into the decisioning workflows our clients use every day. That means faster application reviews, better visibility into borrower behavior, and smarter approvals. We're making it easier for lenders to say "yes" with confidence. Read more below:

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SBA workflows don’t break because of scoring, they break because scoring comes too late. In SMB lending, SBA-aligned credit signals often arrive after packaging and submission, forcing teams to work reactively. CRS helps lenders access 𝗦𝗕𝗦𝗦-𝗮𝗹𝗶𝗴𝗻𝗲𝗱 𝗰𝗿𝗲𝗱𝗶𝘁 𝗶𝗻𝗽𝘂𝘁𝘀 𝘁𝗵𝗿𝗼𝘂𝗴𝗵 𝗮𝗻 𝗔𝗣𝗜, enabling earlier evaluation, prioritization, and borrower guidance without replacing official SBA scoring. Our latest post explains how lenders are modernizing SBA workflows by shifting insight upstream.

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Loan origination systems (LOS) are fast becoming the norm in modern-day lending. These platforms are powered by business rule engines (BREs), which ensure that the lending process is fully automated and executed in line with the rules defined by lenders. Today, BREs in LOS play a crucial role in: ☑️Data collection ☑️Data validation ☑️Eligibility assessment ☑️Risk profiling ☑️Loan offer personalisation ☑️Interest rate determination ☑️Compliance checks By analysing vast volumes of data, BREs make automated decisions based on logic configured by lending institutions—eliminating human bias and error, and ensuring that the lending process remains efficient, accurate, and consistent. Read more about how BREs are powering modern-day LOS and acting as their strategic brain in our latest blog: https://lnkd.in/gJJ5qewW #LoanOriginationSystem #BusinessRuleEngine #Corestrat #LendingAutomation

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Eltropy Launches Unified, Self-Serve Payment System for Credit Unions and Community Banks “Community financial institutions are drowning in vendor relationships and transaction fees,” said Ashish Garg, Co-Founder and CEO of Eltropy. “Our customers were asking for a solution that could handle payments across collections, lending, and account servicing without adding another vendor to their existing stack. As part of the Unified Conversations Platform, Eltropy Payments delivers a fully integrated approach that reduces costs and improves the digital payment experience for consumers.” https://lnkd.in/eBicMw5x Steve Jensen Michael Pupil Laura Chambers Arun Rao Nandita Verma Abhishek Tiwari #fintech #finance #banking #paytech #payments #fintechnews #paymentsnews

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