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THIS REPORT IS STRICTLY CONFIDENTIAL

This SMART Full Review Report (Report) is the property of the U.S. Small Business Administration, Office of

Credit Risk Management. Under no circumstances shall [CDC] disclose or make public this Report or any portion thereof. Unauthorized disclosure of any of the contents of this Report is subject to the penalties in 18

USC 641. The Office of Credit Risk Management must be notified immediately if [CDC] receives a subpoena or other legal process calling for the production of this Report.

U.S. Small Business Administration

Office of Credit Risk Management

504 Loan Program

SMART Full Review Report

[Report Date]

Onsite: [Onsite Dates]

[CDC Name] A Certified Development Company

[Address]

[City, State ZIP]

FIRS #[FIRS #]

i

Table of Contents

EXECUTIVE OVERVIEW

EXECUTIVE SUMMARY

BACKGROUND

ASSESSMENT OF SMART COMPONENTS

Solvency and Financial Condition

Management and Board Governance

Asset Quality and Servicing

Regulatory Compliance

Technical Issues and Mission

Appendix A Regular Servicing Sample Deficiencies

Appendix B Active Purchase / Charge-off Sample Deficiencies

Appendix C 504 Balance Sheet Definitions / Solvency and Financial Condition Ratios

Appendix D CDC’s Lender Profile Assessment

Appendix E Board Member Acknowledgement

SMART Full Review 1 [CDC Name]

EXECUTIVE OVERVIEW

The high-level results of SBA’s SMART Full Review for [CDC] are below. Details to support the assessment follow in the remainder of this Report.

Results of the SMART Review

CDC Reviewed [CDC]

FIRS# [FIRS]

Review Assessment [Acceptable, Acceptable with Corrective Actions Required, Marginally Acceptable with Corrective Actions Required, Less Than Acceptable with Corrective Actions Required]

Component Assessments

Solvency [Acceptable, Acceptable with Corrective Actions Required, Marginally Acceptable with Corrective Actions Required, Less

Than Acceptable with Corrective Actions Required]

Management and Board Governance [Acceptable, Acceptable with Corrective Actions Required, Asset Quality and Servicing [Acceptable, Acceptable with Corrective Actions Required, Regulatory Compliance [Acceptable, Acceptable with Corrective Actions Required, Technical Issues and Mission [Acceptable, Acceptable with Corrective Actions Required, The tables below highlight the CDC’s current SBA statistics, including its 504 Balance Sheet.

Definitions for loan balances are included in Appendix C.

Report Dashboard

CDC Asset Size $ as of XX

SBA Peer Group $

SBA SMART Score [X] as of XX

Delegated Authorities [Enter all applicable: Accredited Lenders Program

(ALP), Premier Certified Lenders Program (PCLP), Authorized CDC Liquidator (ACL), Abridged

Submission Method (ASM), Priority CDC] – expires [Expiration Date]

SMART Full Review 2 [CDC Name]

504 Loan Balance Sheet as of [Month Date, Year]

# of Loans $ of Loans % of Dollars

Total SBA Exposure $

Gross Committed $

Gross Loans $ 100.0%

Active Regular Servicing Balance $ X.X% 100.0%

Current Balance $ X.X%

Stressed Balance $ X.X%

Past Due Balance $

Delinquent Balance $

Deferred Balance $

In Catch-Up Balance $

Active Purchase Defaults $ X.X% 100.0%

Returned to Regular Servicing $ X.X%

In Active Liquidation $ X.X%

SMART Full Review 3 [CDC Name]

EXECUTIVE SUMMARY

Objective and Scope

In accordance with 13 CFR §120.1000 (Risk-Based Lender Oversight) and 13 CFR §120.1050

(Onsite Reviews and Examinations), Certified Development Companies (CDCs) are subject to SBA supervision and periodic Risk-Based Review (RBR) designed to evaluate SBA 504 Loan Program management and operations as they relate to the production and servicing of a 504 loan portfolio. The

RBR of [CDC] is a [Full/Targeted] Review focused on the five SMART components to assess effective portfolio and risk management and to ensure compliance with applicable laws and SBA regulations: 1) Solvency and Financial Condition; 2) Management and Board Governance; 3) Asset

Quality and Servicing; 4) Regulatory Compliance; and 5) Technical Issues and Mission (SMART).

The Review also addresses whether the CDC successfully implemented Corrective Actions to address previous RBR Findings.

[discussion of Review Team’s composition and the review methodology]

Summary Review Assessment and Results

[summary discussion of CDC’s SMART metrics, review assessment, and review Findings &

Recommendations for Improvement]

Findings:

[listing of all Findings with required Corrective Action]

Recommendations for Improvement:

[listing of all Recommendations for Improvement]

Report Prepared by:

[Reviewer-in-Charge Name], Reviewer-in-Charge, Mercadien, P.C. Date

Report Concurred by:

[FA Name], Financial Analyst, SBA Office of Credit Risk Management Date

SMART Full Review 4 [CDC Name]

Report Approved by:

[SFA Name], Financial Analyst, SBA Office of Credit Risk Management Date

[D Name], Director, SBA Office of Credit Risk Management Date

SMART Full Review 5 [CDC Name]

BACKGROUND

[insert background information on CDC here – when & where incorporated, states active in lending, etc.]

Lending By State

States # of Loans $ of Loans % of Total

$ X.X%

[discussion and analysis of CDC’s delegated authority, CDC management and staff, and details of previous

SBA risk based review]

CDC Representative:

[Full Name], [Title]

Phone: [Telephone number]

Email: [Email address]

SMART Full Review 6 [CDC Name]

ASSESSMENT OF SMART COMPONENTS

Solvency and Financial Condition

The Solvency and Financial Condition component of the SMART Review focuses on the organization’s financial ability to operate and portfolio performance.

SMART Solvency and Financial Condition Metrics

Key Rates CDC Rate Score Peer Group Average

5 Year Cumulative Net Yield X.X% [Lower Risk, Moderate Risk, Higher Risk X.X%

12 Month Default Rate X.X%

Higher Risk

5 Year Default Rate X.X%

Higher Risk]

[discussion and analysis of CDC’s SMART metrics and comparison with Peer Group, with details regarding any high risk metrics]

The table below presents a summary of key trends and ratios based on the CDC’s most recent financial statements. Ratio definitions are included in Appendix C.

CDC Solvency and Financial Condition Trends FYE [m/d/yyyy] FYE [m/d/yyyy] % Change

Net Assets $ $ [x.x]%

Total Assets $ $ [x.x]%

Total Revenues $ $ [x.x]%

504-Related Revenues $ $ [x.x]%

Total Expenses $ $ [x.x]%

504-Related Expenses $ $ [x.x]%

Change in Net Assets $ $ [x.x]%

Reserves for Future Operations $ $ [x.x]%

Cash $ $ [x.x]%

CDC Solvency and Financial Condition Ratios

Operating Reserves [x.x] months [x.x] months [x.x]%

Debt to Asset Ratio [x.x]% [x.x]% [x.x]%

Cash to Total Assets Ratio [x.x]% [x.x]% [x.x]%

Operating Margin [x.x]% [x.x]% [x.x]%

Solvency and Financial Condition Trend Analysis

[analysis of CDC’s financial condition here.]

SMART Full Review 7 [CDC Name]

Liquidity

[discussion and analysis of CDC’s liquidity]

Expense Analysis

CDC Expense Breakdown - FYE [m/d/yyyy]

Expense Description

Total

Amount

% of

Expenses

Revenues

% of 504

Change

Over

Prior

Year

CDC Manager Compensation $ [x.x]% [x.x]% [x.x]% [x.x]%

Total CDC Staff Compensation $ [x.x]% [x.x]% [x.x]% [x.x]%

Board Compensation $ [x.x]% [x.x]% [x.x]% [x.x]%

Deferred Compensation $ [x.x]% [x.x]% [x.x]% [x.x]%

Referral Fees Paid $ [x.x]% [x.x]% [x.x]% [x.x]%

Investment in Other Local Economic Development $ [x.x]% [x.x]% [x.x]% [x.x]%

Rent $ [x.x]% [x.x]% [x.x]% [x.x]%

[Etc.] $ [x.x]% [x.x]% [x.x]% [x.x]%

[discussion and analysis of CDC expenses]

Servicing Fees

The table below shows a breakout of servicing fees charged for the CDC’s 504 loans disbursed over the past five years.

CDC Servicing Fee Analysis

FY # of Loans Disbursed

Gross Dollar Value of

Loans Disbursed

Weighted Average

Servicing Fee Rate

<latest available year– 4> $[x] [x.xxx]%

<latest avail.

year – 3> $[x] [x.xxx]% year – 2> $[x] [x.xxx]% year – 1> $[x] [x.xxx]% year> $[x] [x.xxx]%

Total x $[x]

[discussion of CDC’s serving fees here]

SMART Full Review 8 [CDC Name]

Summary Assessment of Solvency and Financial Condition:

Management and Board Governance

The Management and Board Governance component of the SMART Review focuses on the organizational structure, policies, and internal controls of the CDC.

SMART Management and Board Governance Metrics

Forecasted Purchase Rate X.X%

[Lower Risk, Moderate Risk, High Risk Loan Origination Rate X.X%

Loans in Purchase Status Over 3 Years Rate X.X%

N/A

[discussion and analysis of metrics for Management and Board Governance]

Organizational Structure

[description of CDC operations including staff, management, contractors, and Board]

[Insert Org Chart]

SMART Full Review 9 [CDC Name]

Regulatory Organizational Requirements

[discussion and assessment of Board of Directors’ compliance with the operating requirements as set forth in 13 CFR §120.823]

Board of Directors

Name

Title

Executive Director Name

SMART Full Review 10 [CDC Name]

Director’s Role & Committee Membership

Director’s Background &

Expertise

No. Director’s Name

Residence /

Office Company and Title # o f Y ea rs n t h e B ar d

V ti g

E x ec u v

L an

C m er ci al en in

W rk fo rc e, it y r co ic

D ev

F

R is k

M ag em rp ra te

G ce eg

I ss es el at

In rn tr ls

1 ●

Board Oversight

[discussion and analysis of Board oversight]

Conflict of Interest Policy

[discussion and analysis of CDC’s Conflict of Interest

Policy]

Bylaws

[discussion of CDC’s bylaws and their compliance with key SBA Loan Program Requirements] Areas of Review / Requirements Deficiencies

Board Size, Composition, and Eligibility

Board Meetings and Responsibilities

Committee Size, Composition, and Delegation Limits

SMART Full Review 11 [CDC Name]

Loan Policies and Credit Approval Process

Delegations of Authority

[discussion and analysis of any CDC committees]

<If the CDC has a Loan Committee that is comprised of non-Board members>: The Loan Committee is comprised of the following members:

Loan Committee

Office Company and Title

Board

Member

Lending

Experience

Name City, ST Company, Title ● ●

[discuss the compliance of committee with SBA Loan

Program Requirements]

Management Succession Plan and Executive Compensation Policy

[discuss management succession plan and Executive

Compensation Policy]

Internal Control Policy and Risk Rating Methodology

[discussion and analysis of CDC’s Internal Control

Policy and Risk Rating Methodology]

SMART Full Review 12 [CDC Name]

Independent Loan Review

[discusion and analysis of CDC’s most recent

Independent Loan Review (ILR)]

Summary Assessment of Management and Board Governance:.

Asset Quality and Servicing

The Asset Quality and Servicing component involves an assessment of the quality of the CDC’s SBA

504 loan origination, closing, servicing, and liquidation practices.

SMART Asset Quality and Servicing Metrics

Stressed Loan Rate X.X%

Charge-Off Rate (Over Last 5 Years) X.X%

Early Problem Loan Rate X.X%

Other Asset Quality and Servicing Rates $ of Loans CDC Rate Peer Group Average

Past Due $ X.X% X.X%

Delinquent $ X.X% X.X%

Deferred $ X.X% X.X%

In Catch-Up $ X.X% X.X%

Early Default Loan Rate $ X.X% X.X%

Active Purchase Rate $ X.X% X.X%

12 Month Purchase Rate $ X.X% X.X%

12 Month Charge-Off Rate $ X.X% X.X%

[Discussion of metrics and analysis of loan portfolio]

Loan File Review Sample Selection and Results

[description of regular servicing loan sample and active purchase/charge-off sample]

In this sample of [X] loans, [X] loans had a total of [X] deficiencies. Refer to the table below and

SMART Full Review 13 [CDC Name]

Appendix B for a detailed breakdown of deficiencies.

Summary of Loan File Deficiencies

# of Loans Percent of

Sample $ of Loans

Total Sample $

Loans with Deficiencies X.X% $ X.X%

Deficiencies by Category*: Regular Servicing Active Purchase / Charge-off Total

Eligibility

Underwriting

Closing/Disbursement

Servicing

Intensive Servicing

* Some loans contain more than one identified deficiency and, in other cases, a loan may have multiple deficiencies per category.

[Detailed discussion of deficiencies by category]

Credit Policy and Procedures

[discussion and analysis of CDC’s Credit Policy and its compliance with SBA Loan Program Requirements]

Assessment

[Summary of Asset Quality and Servicing Findings, Recommendations for Improvement and Assessment.]

Regulatory Compliance

The Regulatory Compliance component reviews the CDC’s compliance with SBA regulations and

Loan Program Requirements.

SMART Regulatory Compliance Metrics

Key Rates CDC Rate Score

Minimum Level of 504 Activity [Lower Risk, Moderate Risk, Higher Risk]

[discussion of the number of recent loan approvals and

SMART Full Review 14 [CDC Name]

External Oversight

[description and discussion of CDC’s CPA-prepared annual financial statements and their compliance with

SBA Loan Program Requirements]

Reporting to SBA

[description of CDC’s compliance with reporting requirements]

State of Incorporation

[explain where CDC is incorporated and active]

Tax Returns

[description of CDC’s federal and state tax filings and review of IRS Form 990]

Liability Insurance Policies – Directors’ & Officers’/Errors & Omissions (D&O/E&O)

[description of CDC’s insurance policies and assessment as to whether they comply with SBA Loan

ALP Requirements

[discussion of CDC’s compliance with ALP loan program requirements outlined in 13 CFR 120 and SOP

50 10 5(K)]

Loan Loss Reserve Fund Account

[discussion and assessment of CDC’s loan loss reserve fund]

SMART Full Review 15 [CDC Name]

Type of PCLP Loan # of Loans Original Debenture

Active Loans

Active Purchase

1% Requirement

Plus Invoiced Amount

Total Required LLRF

Designated Attorneys

[discussion of designated attorneys and assessment of attorneys’ compliance with SBA Loan Program

Requirements] [CDC Name]’s Designated Attorneys

Professional Liability Insurance

Name of Attorney

State of

License

Training

Expires

Policy

Expires Per Claim Aggregate Deductible

SBA 504 Debt Refinancing Program

[description and assessment of CDC’s participation in the 504 Debt Refinancing Program as it pertains to

Loan Dollars Approved

For FYE [Most Recent Year]

Total SBA 504 Loan Program

Dollars Approved

FYE [Prior Completed Fiscal Year] Percentage

$ $ x.x%

The table below illustrates the top three industry concentrations for [CDC Name]’s portfolio of loans issued under the SBA 504 Debt Refinancing Program.

Top 3 NAICS – SBA 504 Debt Refinancing Program

NAICS Subsector # of Loans $ of Loans %

SMART Full Review 16 [CDC Name]

Previous Review Findings

[detailed listing of previous review findings, requirement corrective actions, explanation of actions taken by CDC to remediate findings, and assessment of reviewer as to whether the finding has been fully remediated]

Summary Assessment of Regulatory Compliance:

Technical Issues and Mission

SMART Technical Issues and Mission Metrics

Key Rates CDC Rate Score Peer Group Rate

Average SBPS (weighted)

Top Industry Concentration Rate X.X%

[describe and analyze those metrics which are considered Higher Risk or which significantly underperform the Peer Group]

[describe industry concentration of CDC] Top 3 NAICS

Investment in Other Local Economic Development Activities

[describe and assess CDC’s investment in other local economic development]

SMART Full Review 17 [CDC Name]

Use of Loan Agents

[describe and assess the CDC’s use of loan agents]

Use of Professional Service Contracts

[describe the CDC’s use of professional services contracts and assess whether they comply with SBA

Loan Program Requirements]

Summary Assessment of Technical Issues and Mission:

SMART Full Review 18 [CDC Name]

Appendix A

Regular Servicing Sample Deficiencies

$ of Loans

Deficiencies by Category*

* Some loans contain more than one identified deficiency and, in other cases, a loan has multiple deficiencies per category.

The following is the list of deficiencies found in the Regular Servicing sample loans reviewed.

Borrower Loan Number Loan Status Closing Date Delivery Method Total Debt li ib il

U w ri lo si b

S

<e.g. Current, Three Months

Past Due, In

Deferment, etc.> <m/d/yyyy>

<e.g. ALP, 504 Reg, etc.> $x

SMART Full Review 19 [CDC Name]

SMART Full Review 20 [CDC Name]

SMART Full Review 21 [CDC Name]

Appendix B

Active Purchase / Charge-off Sample Deficiencies

$ of Loans*

Deficiencies by Category**

* Total debt includes charged-off amounts.

** Some loans contain more than one identified deficiency and, in other cases, a loan has multiple deficiencies per category.

The following is the list of deficiencies found in the Active Purchase / Charge-off sample loans reviewed.

Borrower Loan Number Loan Status Closing Date Purchase Date Delivery Method Total Debt

<e.g. Purchased, Charged-Off> <m/d/yyyy> <m/d/yyyy>

<e.g. ALP, 504

Reg, etc.> $x

SMART Full Review 22 [CDC Name]

SMART Full Review 23 [CDC Name]

SMART Full Review 24 [CDC Name]

Appendix C

504 Balance Sheet Definitions / Solvency and Financial Condition Ratios

504 Balance Sheet Definitions

Total SBA Exposure Gross Committed + Active Regular Servicing Balance + Active Defaults

Gross Committed Approved but not Cancelled and not Disbursed

Active Regular

Servicing Balance

Current Balance + Stressed Balance

Stressed Balance Past Due Balance + Delinquent Balance + Deferred Balance + Catch-up Balance

Active Defaults Regular Servicing Balance + Liquidation Balance

Solvency and Financial Condition Ratios

Operating Reserves Reserves for Future Operations / (Total Expenses / 12)

Debt to Asset Ratio Total Liabilities / Total Assets

Cash to Total Assets

Ratio

Cash / Total Assets

Operating Margin Change in Net Assets / Total Revenues

Appendix D

CDC’s Lender Profile Assessment

The attached Lender Profile Assessment (LPA), as of [date], was used as part of this Review and calculates the SMART metrics discussed throughout the Report.

Appendix E

Board Member Acknowledgement

The Board Members of [CDC Name] acknowledge receipt of this SMART [Full/Targeted] Review

Report and the accompanying cover letter to the Report from the SBA Office of Credit Risk

Management dated [REPORT DATE].

Board Member Name Board Member Signature Date Received

THIS REPORT IS STRICTLY CONFIDENTIAL

This SMART Analytical Review Report (Report) is the property of the U.S. Small Business Administration, Office of Credit Risk Management. Under no circumstances shall [CDC] disclose or make public this document or any portion thereof. Unauthorized disclosure of any of the contents of this Report is subject to the penalties in 18 USC 641. The Office of Credit Risk Management must be notified immediately if [CDC] receives a subpoena or other legal process calling for the production of this Report.

U.S. Small Business Administration

Office of Credit Risk Management

504 Loan Program

SMART Analytical Review Report

[Report Date]

[CDC Name] A Certified Development Company

[City, State ZIP]

FIRS #[FIRS #]

Commented [A1]: To be populated by SBA

Commented [A2]: If CDC uses a trade name or ‘dba’, this should read:

[CDC Name] (dba [dba name])

Every other reference throughout the report will use the dba name, except the first sentence in the Background section, which should introduce the full name and dba name.

Commented [A3]: Include “FIRS #” – e.g., FIRS #C123456 i

Table of Contents

EXECUTIVE OVERVIEW

EXECUTIVE SUMMARY

BACKGROUND

ASSESSMENT OF SMART COMPONENTS

Solvency and Financial Condition

Management and Board Governance

Asset Quality and Servicing

Regulatory Compliance

Technical Issues and Mission

Appendix A 504 Balance Sheet Definitions / Solvency and Financial Condition Ratios

Appendix B CDC’s Lender Profile Assessment Scorecard and Definitions

Appendix C Board Member Acknowledgement

Commented [A4]: Confirm that this ToC is updated before sending to the next level of review

SMART Analytical Review 2 [CDC Name]

EXECUTIVE OVERVIEW

The high-level results of SBA’s SMART Analytical Review for [CDC] are below. Details to support the assessment follow in the remainder of this Report.

Results of the SMART Review

CDC Reviewed [CDC]

FIRS# [FIRS]

Review Assessment [Acceptable, Acceptable with Corrective Actions Required, Component Assessments

Solvency [Acceptable, Acceptable with Corrective Actions Required, Management and Board Governance [Acceptable, Acceptable with Corrective Actions Required, Asset Quality and Servicing [Acceptable, Acceptable with Corrective Actions Required, Regulatory Compliance [Acceptable, Acceptable with Corrective Actions Required, Technical Issues and Mission [Acceptable, Acceptable with Corrective Actions Required, The tables below highlight the CDC’s current SBA statistics, including its 504 Balance Sheet.

Definitions for loan balances are included in Appendix A.

Report Dashboard

CDC Asset Size $ as of XX

SBA Peer Group $

SBA SMART Score [X] as of XX

Delegated Authorities [Enter all applicable: Accredited Lenders

Program (ALP), Premier Certified Lenders

Program (PCLP), Authorized CDC Liquidator

(ACL), Abridged Submission Method (ASM), Priority CDC] – expires [Expiration Date]

Commented [A5]: The completed Executive Overview should fit onto one page.

Commented [A6]: Avoid using a Marginally / Less Than Acceptable rating on small CDCs where this is their first SBA Risk

Based Review – unless they have really egregious problems.

Commented [A7]: Should be ‘Total Assets’ from the financials used in the Solvency section

Commented [A8]: From the LPA

Commented [A9]: From the LPA

Commented [A10]: If CDC has ACL status, reach out to FA for expiration date.

Commented [A11]: For Priority CDC and ASM, replace with ‘no expiration date’

SMART Analytical Review 3 [CDC Name]

504 Loan Balance Sheet as of [Month Date, Year]

# of Loans $ of Loans % of Dollars

Total SBA Exposure $

Gross Loans $ 100.0%

Active Regular Servicing Balance $ X.X% 100.0%

Current Balance $ X.X%

Stressed Balance $ X.X%

Past Due Balance $

Delinquent Balance $

Deferred Balance $

In Catch-up Balance $

Active Purchase Defaults $ X.X% 100.0%

Returned to Regular Servicing $ X.X%

In Active Liquidation $ X.X%

Commented [A12]: If any lines are 0 please remove

Commented [A13]: = Gross Committed + Active Regular

Servicing Balance + Active Defaults

Commented [A14]: Percentage of Gross Loans

Commented [A15]: Percentage of Active Regular Servicing

Balance

Commented [A16]: If there is only one component of Stressed, move it up to this row and identify it in parentheses

Commented [A17]: Percentage of Active Regular Servicing Balance

Commented [A18]: If there is a loan with an Active Purchase balance in both ‘Returned to Regular Servicing’ and ‘In Active

Liquidation’, please do the following:

o Keep in mind that the Active Purchase Defaults count will not add up. For example, there could be 10 purchases in Regular

Servicing, 6 purchases in Liquidation, and 15 total Active Purchases. Leave these numbers as is.

oPut a * next to the Active Purchase Defaults count oAdd a comment on the Active Purchase Defaults count that says ‘Note to SBA: The LPA includes a total of x Active

Purchases due to one loan(s) ([#xxxxxxxxxx]) with a balance of $x in Regular Servicing and a balance of $x in Liquidation.’

oAs a footnote to the table, add ‘* One loan amount is split across Regular Servicing and Liquidation statuses.’

Commented [A19]: Percentage of Gross Loans

Commented [A20]: Percentage of Active Defaults

Commented [A21]: Percentage of Active Defaults

SMART Analytical Review 4 [CDC Name]

EXECUTIVE SUMMARY

Objective and Scope

In accordance with 13 CFR §120.1000 (Risk-Based Lender Oversight) and 13 CFR §120.1050

(Onsite Reviews and Examinations), Certified Development Companies (CDCs) are subject to

SBA supervision and periodic Risk-Based Review (RBR) designed to evaluate SBA 504 Loan

Program management and operations as they relate to the production and servicing of an SBA 504 loan portfolio. The RBR of [CDC] is an Analytical Review focused on the five SMART components to assess effective portfolio and risk management and to ensure compliance with applicable laws and SBA regulations: 1) Solvency and Financial Condition; 2) Management and

Board Governance; 3) Asset Quality and Servicing; 4) Regulatory Compliance; and 5) Technical

Issues and Mission (SMART). The Review also addresses whether the CDC successfully implemented Corrective Actions to address previous RBR Findings.

[discussion of Review Team’s composition and the review methodology]

Summary Review Assessment and Results

[summary discussion of CDC’s SMART metrics, review assessment, and review Findings &

Recommendations for Improvement]

Findings:

[listing of all Findings with required Corrective

Action]

Recommendations for Improvement:

[listing of all Recommendations for Improvement]

Report Prepared by:

[Reviewer-in-Charge Name], Reviewer-in-Charge, Mercadien, P.C. Date

Commented [A22]: Delete if a review was not previously performed

Commented [A23]: Complete with Segoe Script font, size 11, italicized and add the date we deliver to SBA

SMART Analytical Review 5 [CDC Name]

[FA Name], Financial Analyst, SBA Office of Credit Risk Management Date

[SFA name], Supervisory Financial Analyst, SBA Office of Credit Risk

Management

Date

[D name], Director, SBA Office of Credit Risk Management Date

Commented [A24]: Only include this approval line if the CDC is over $350M or is rated at Marginally Acceptable or Less Than

Acceptable. If this is added, change Paul Kirwin’s line to “Concurred by”

SMART Analytical Review 6 [CDC Name]

BACKGROUND

[insert background information on CDC here – when & where incorporated, states active in lending, etc.]

Lending By State

States # of Loans $ of Loans % of Total

[discussion and analysis of CDC’s delegated authority, CDC management and staff, and details of previous SBA risk based review]

CDC Representative:

[Full Name], [Title]

Phone: [Telephone number]

Email: [Email address]

Commented [A26]: Remove if only one state

Commented [A25]: If there is a state in this table where the

CDC does not have lending authority, add in the paragraph above

‘The CDC also has a loan to a borrower in [State].’ Add an asterisk within the table on these states, and a footnote below the table:

* Loans approved outside the CDC’s Area of Operations in YYYY.

Transactions are related to borrowers the CDC had previously assisted in its Area of Operations to obtain an SBA 504 loan.

SMART Analytical Review 7 [CDC Name]

ASSESSMENT OF SMART COMPONENTS

Solvency and Financial Condition

The Solvency and Financial Condition component of the SMART Review focuses on the organization’s financial ability to operate and portfolio performance.

SMART Solvency and Financial Condition Metrics

5 Year Cumulative Net Yield X.X% [Lower Risk, Moderate

Risk, Higher Risk]

12 Month Default Rate X.X%

5 Year Default Rate X.X%

[discussion and analysis of CDC’s SMART metrics and comparison with Peer Group, with details regarding any high risk metrics]

The table below presents a summary of key trends and ratios based on the CDC’s most recent financial statements. Ratio definitions are included in Appendix A.

CDC Solvency and Financial Condition Trends

Net Assets $ $ [x.x]%

Total Assets $ $ [x.x]%

Total Revenues $ $ [x.x]%

504-Related Revenues $ $ [x.x]%

Total Expenses $ $ [x.x]%

504-Related Expenses $ $ [x.x]%

Change in Net Assets $ $ [x.x]%

Reserves for Future Operations $ $ [x.x]%

Cash $ $ [x.x]%

CDC Solvency and Financial Condition Ratios

Operating Reserves [x.x] months [x.x] months [x.x]%

Debt to Asset Ratio [x.x]% [x.x]% [x.x]%

Cash to Total Assets Ratio [x.x]% [x.x]% [x.x]%

Operating Margin [x.x]% [x.x]% [x.x]%

Solvency and Financial Condition Trend Analysis[analysis of CDC’s financial condition here.]

Commented [A27]: Latest FYE

Commented [A28]: Previous FYE

Commented [A29]: Reserves are now requested directly from the CDC in the Notification Letter; letters issued after 10/24/2017 will request the CDC’s calculation.

If we calculate something significantly different using the formula Reserves = Unrestricted Current Assets – Current Liabilities, then we should use our number in the table, and document ‘Although the

CDC indicated that its Reserves for Future Operations were x, the Review Team calculated as y based on …...

Commented [A30]: Please include Certificates of Deposit in

Cash calculation, and cover with a Note to SBA comment.

Commented [A31]: Note: Use CDC Name - Solvency and

Financial Condition Worksheet.xlsx to calculate the percentages and ratios in all these tables. This will help save time and streamline

QC. Save the Excel worksheet on MFolder.

Commented [A32]: Latest FYE

Commented [A33]: Previous FYE

Commented [A34]: Reserves for Future Operations / (Total

Expenses / 12)

(Measures ability to sustain operations using only Reserves)

Commented [A35]: Metric calculations have been added to

Commented [A36]: Total Liabilities / Total Assets

(Measures Leverage)

Commented [A37]: Cash / Total Assets

(Measures Liquidity)

Commented [A38]: Change in Net Assets / Total Revenues

Illustrates CDC’s ability to produce a potential surplus, which could be drawn on if needed in future years.

SMART Analytical Review 8 [CDC Name]

Liquidity

[discussion and analysis of CDC’s liquidity]

Expense Analysis

CDC Expense Breakdown - FYE [m/d/yyyy]

Expense Description

Amount

% of 504

Change

Over

Prior

Year

CDC Manager Compensation $ [x.x]% [x.x]% [x.x]% [x.x]%

Total CDC Staff Compensation $ [x.x]% [x.x]% [x.x]% [x.x]%

Board Compensation $ [x.x]% [x.x]% [x.x]% [x.x]%

Deferred Compensation $ [x.x]% [x.x]% [x.x]% [x.x]%

Referral Fees Paid $ [x.x]% [x.x]% [x.x]% [x.x]%

Investment in Other Local Economic Development $ [x.x]% [x.x]% [x.x]% [x.x]%

Rent $ [x.x]% [x.x]% [x.x]% [x.x]%

[analysis of CDC expenses]

Servicing Fees

[discussion of CDC’s servicing fees here]

Commented [A39]: Form 990 is the preferred source for compensation info; if Form 990 is not yet available for the most recent FYE, use the figures from the financial statement

If the CDC does not have any employees, but we still have

Personnel Expenses on the audited financials, please include that in the table -- can delete the row for the CDC Manager if not specified.

Commented [A40]: Using Form 990 – Take from Part VII, 1d, total of Column D and F for the CDC Manager

Commented [A41]: Using Form 990 – Take from the main tax form, Line 15

Note: This figure should be inclusive of CDC Manager

Compensation

Commented [A42]: If CDC staff supports non-504 activities such as other loan programs, add an asterisk here, and add a footnote beneath the table:

*Includes fees for support of the [x] and 504 Loan Programs

Commented [A43]: Move this row up if necessary – for example, if this relates only to the CDC Manager’s compensation

Commented [A44]: Should represent direct expenses only.

Generally this would not include things that aren’t direct expenses such as loans funded through non-504 loan programs, as these funds are capitalized. In those cases, just add a Note to SBA that these loan programs are discussed further in the Technical Issues and Mission section of the Report.

If the CDC has 0 direct expenses related to investment – then delete the line from this table.

Commented [A45]: Remove if not applicable

Commented [A46]: Pay particular attention to related-party expenses such as contracts / leases with the company owned by a

Board member, etc.

Delete if nothing extra to note

Commented [A47]: Do not include common operational expenses such as rent or closing fees paid to attorneys, unless we have more detail to add / conclusions to make in the narrative below

SMART Analytical Review 9 [CDC Name]

CDC Servicing Fee Analysis

FY # of Loans Disbursed

Gross Dollar Value of

Loans Disbursed

Weighted Average

<latest available year–

4> $[x] [x.xxx]% year – 3> $[x] [x.xxx]% year – 2> $[x] [x.xxx]% year – 1> $[x] [x.xxx]% year> $[x] [x.xxx]%

Total x $[x]

Summary Assessment of Solvency and Financial Condition:

The Management and Board Governance component of the SMART Review focuses on the organizational structure, policies, and internal controls of the CDC.

SMART Management and Board Governance Metrics

Forecasted Purchase Rate X.X%

High Risk Loan Origination Rate X.X%

Loans in Purchase Status Over 3 Years Rate X.X%

[discussion and analysis of metrics for Management and Board Governance]

Organizational Structure

[description of CDC operations including staff, management, contractors, and Board]

The [CDC’s Name] organizational structure is as follows:

Commented [A48]: Information in this table should be copied from the LPA Asset Quality tab Vintage Analysis section.

Commented [A49]: If a CDC had one year (in the past five) without any disbursements, include the year in the table with 0 loans disbursed and “N/A” for Gross Dollar Value and Weighted Avg

Commented [A50]: For this particular column – please use 3 decimal places.

Commented [A51]: Do not include the names of other companies, organizations, or CDCs when discussing staff or

Directors’ former positions. Use a general term instead – e.g.

‘Served as Executive Director of another CDC’ or ‘served as Vice President of Commercial Lending for a regional bank’.

If there is a strong reason to include it, place it in a comment box with a Note to SBA.

SMART Analytical Review 10 [CDC Name]

[Insert Org Chart]

Regulatory Organizational Requirements

[discussion and assessment of Board of Directors’ compliance with the operating requirements as set forth in 13 CFR §120.823]

Executive Director Name

Commented [A52]: Make sure org chart shows names – last names are fine

If contractor names were provided, include them in the org chart

Commented [A53]: Insert a screenshot of the CDC’s org chart.

Or, if the screenshot is hard to read, create an org chart using this format (White background, black text, Times New Roman 10pt font)

SMART Analytical Review 11 [CDC Name]

Director’s Role & Committee Membership

Director’s Background &

Expertise

No. Director’s Name

Office Company and Title # f Y ea

B

V x ec

W rk fo rc e, co ev

F k

M ag rp

G ce

I ss es el rn tr ls

1 ●

Board Oversight

[discussion and analysis of Board oversight]

Statements of Personal History

[discussion and analysis of CDC’s practices regarding Statements of Personal History and

Conflict of Interest Policy

[discussion and analysis of CDC’s Conflict of Interest

Policy]

Bylaws

[discussion of CDC’s bylaws and their compliance with key SBA Loan Program Requirements]

Commented [A54]: Generally, the guidance is to trust the chart provided by the CDC; you do not need to review Board member resumes unless there is some concern that the chart is inaccurate.

Commented [A55]: Compare the last name of each Director to the last name of the CDC President/Executive Director. If the same, research this.

Commented [A56]: For purposes of the 50% test, this should only include those members with current commercial lending experience. Retirees can be excluded from this count if we find that the composition is over 50%. If Commercial Lending concentration is over 50% after excluding retirees, we may need to review the resumes to determine if they all have current experience.

SMART Analytical Review 12 [CDC Name]

Board Size, Composition, and Eligibility

Board Meetings and Responsibilities

Committee Size, Composition, and Delegation Limits

Loan Policies and Credit Approval Process

Delegations of Authority[discussion and analysis of any CDC committees]

Office Company and Title

Board

Member

Experience

Name City, ST Company, Title ● ●

[discuss the compliance of committee with SBA Loan

Commented [A57]: Loan Committee must consist of individuals with a background in financial risk management, commercial lending or legal issues relating to commercial lending who are not associated with another CDC.

SMART Analytical Review 13 [CDC Name]

Management Succession Plan and Executive Compensation Policy

[discuss management succession plan and Executive

Compensation Policy] Internal Control Policy and Risk Rating Methodology

[discussion and analysis of CDC’s Internal Control

Policy and Risk Rating Methodology]

Independent Loan Review

[discusion and analysis of CDC’s most recent

Independent Loan Review (ILR)]

Summary Assessment of Management and Board Governance:.

Asset Quality and Servicing

The Asset Quality and Servicing component involves an assessment of the quality of the CDC’s

SBA 504 loan origination, closing, servicing, and liquidation practices.

SMART Asset Quality and Servicing Metrics

Stressed Loan Rate X.X%

Charge-Off Rate (Over Last 5 Years) X.X%

Early Problem Loan Rate X.X%

Commented [A58]: Per the Independent Loan Review Guide, please confirm that the CDC’s Internal Control Policy establishes

Independent Loan Review guidelines specifying:

• Frequency of the review (no less than annually);

• Independence of the loan reviewers and credentials of the reviewers;

• Review sample size;

• Sampling methodology for loans and appraisals originated in the last 12 months for underwriting/closing requirements;

• Sampling methodology for reviewing loan in servicing based on loans that are current, delinquent, in intensive servicing or liquidation;

• Appraisal review standards; and

• Requirements for work papers and documentation

All of these items should be discussed in the policy in detail.

Commented [A59]: The Internal Control Policy and Risk Rating

Methodology sections are now combined. If the ICP lacks FFIR-compliant risk ratings, and there are other risk rating methodology deficiencies as well (such as items 1-5 in the second paragraph here), then issue a combined Finding.

Commented [A60]: Issues with the review should be cited as findings effective 3/1/16

Commented [A61]: If the CDC engages a third party do not reference them by name

Commented [A62]: If the CDC’s most recent ILR is in progress at the time they responded to the Notification Letter, and it is likely that the ILR report has been completed and/or presented to the

Board by the time we deliver this SMART Review to SBA, reach out to the CDC for a copy of the ILR Report / evidence of Board review.

If we do not reach out to the CDC, or the ILR Report has not been finalized and presented to the Board, then issue a Recommendation for the CDC to provide a copy of the completed report to SBA along with evidence of the Board’s review of the ILR Report and discussion of any corrective actions required.

https://www.sba.gov/sites/default/files/Independent-Loan-Reviews-Guide.pdf

SMART Analytical Review 14 [CDC Name]

Other Asset Quality and Servicing Rates $ of Loans CDC Rate Peer Group Average

Past Due $ X.X% X.X%

Delinquent $ X.X% X.X%

Deferred $ X.X% X.X%

In Catch-Up $ X.X% X.X%

Early Default Loan Rate $ X.X% X.X%

Active Purchase Rate $ X.X% X.X%

12 Month Purchase Rate $ X.X% X.X%

12 Month Charge-Off Rate $ X.X% X.X%

[Discussion of metrics and analysis of loan portfolio]

[discussion and analysis of CDC’s Credit Policy and its compliance with SBA Loan Program

Assessment

[Summary of Asset Quality and Servicing Findings, Recommendations for Improvement and

Assessment.]

Regulatory Compliance

The Regulatory Compliance component reviews the CDC’s compliance with SBA regulations and

Loan Program Requirements.

SMART Regulatory Compliance Metrics

Key Rates CDC Rate Score

Minimum Level of 504 Activity [Lower Risk, Moderate Risk, Higher Risk]

[discussion of the number of recent loan approvals and compliance with SBA Loan Program

Commented [A63]: Note: Do not include the Forecasted

Purchase Rate in this table, as it is a duplicate of the rate in the

Management and Board Governance section.

Commented [A64]: If CDC uses Loan Policy change the name and use the same terms throughout. If the CDC has multiple policies, change header to collective name per comment below

SMART Analytical Review 15 [CDC Name]

External Oversight

[description and discussion of CDC’s CPA-prepared annual financial statements and their compliance with

State of Incorporation

[explain where CDC is incorporated and active]

Tax Returns

[description of CDC’s federal and state tax filings and review of IRS Form 990]

Liability Insurance Policies – Directors’ & Officers’/Errors & Omissions (D&O/E&O)

[description of CDC’s insurance policies and assessment as to whether they comply with SBA

ALP Requirements

[discussion of CDC’s compliance with ALP loan program requirements outlined in 13 CFR 120 and

SOP 50 10 5(K)]

Loan Loss Reserve Fund Account

[discussion and assessment of CDC’s loan loss reserve fund]

SMART Analytical Review 16 [CDC Name]

Type of PCLP Loan # of Loans Original Debenture

Active Loans

Active Purchase

1% Requirement

Plus Invoiced Amount

Total Required LLRF

Designated Attorneys[discussion of designated attorneys and assessment of attorneys’ compliance with SBA Loan

[CDC Name]’s Designated Attorneys

Professional Liability Insurance

Name of Attorney

State of

License

Training

Expires

Policy

Expires Per Claim Aggregate Deductible

[description and assessment of CDC’s participation in the 504 Debt Refinancing Program as it pertains to

Loan Dollars Approved

For FYE [Most Recent Year]

Total SBA 504 Loan Program

Dollars Approved

FYE [Prior Completed Fiscal

Year] Percentage

$ $ x.x%

Commented [A65]: If PCLP (or formerly PCLP and there are active PCLP loans in the portfolio), perform reserve calculation and assess adequacy.

Otherwise, remove section if not applicable.

Commented [A66]: Update 12-23-17: Remove section if CDC does not have Priority CDC, ALP, or PCLP status

Commented [A67]: Calculation:

Previous Training Certificate Date + 2 years – 1 day

Commented [A68]: Both Per Claim and Aggregate limits need to be at least $1M; if not, check with FA to determine if they have a hardship exemption ($500,000/$1M limit). If so, explain below.

Effective 1/1/2018, Hardship waivers only last 1 year and must be granted by SBA on an annual basis. See red paragraph below for an example Recommendation for attorneys to request these waivers annually going forward.

Commented [A69]: From SOP 50 10 5(K): A deductible not to exceed $20,000 for individuals and firms with 3 or fewer attorneys, $50,000 for law firms with more than 3 attorneys or $100,000 for large law firms with more than 25 attorneys.

Commented [A70]: Remove section if not applicable

If the CDC’s last 504 Debt Refi approval was more than one fiscal year ago (e.g., 2016), please fill out this section based on compliance at that time (e.g., look at FY 2016 debt refi approvals vs. FY 2015 overall 504 approvals).

Commented [A71]: = SBA 504 Debt Refinancing Program

Loan Dollars Approved For FYE [Most Recent Year] / Total SBA

504 Loan Program Dollars Approved FYE [Prior Completed Fiscal Year]

SMART Analytical Review 17 [CDC Name]

The table below illustrates the top three industry concentrations for [CDC Name]’s portfolio of loans issued under the SBA 504 Debt Refinancing Program.

Top 3 NAICS – SBA 504 Debt Refinancing Program

Previous Review Findings

[detailed listing of previous review findings, requirement corrective actions, explanation of actions taken by CDC to remediate findings, and assessment of reviewer as to whether the finding has been fully remediated]

Summary Assessment of Regulatory Compliance:

Technical Issues and Mission

SMART Technical Issues and Mission Metrics

Key Rates CDC Rate Score Peer Group Rate

Average SBPS (weighted)

Top Industry Concentration Rate X.X%

[describe and analyze those metrics which are considered Higher Risk or which significantly underperform the Peer Group]

[describe industry concentration of CDC]

Commented [A72]: From the LPR

SMART Analytical Review 18 [CDC Name]

Top 3 NAICS

Investment in Other Local Economic Development Activities

[describe and assess CDC’s investment in other local economic development]

Use of Loan Agents[describe and assess the CDC’s use of loan agents]

Use of Professional Service Contracts

[describe the CDC’s use of professional services contracts and assess whether they comply with SBA

Summary Assessment of Technical Issues and Mission:

504 Balance Sheet Definitions / Solvency and Financial Condition Ratios

504 Balance Sheet Definitions

Total SBA Exposure Gross Committed + Active Regular Servicing Balance + Active Defaults

Gross Committed Approved but not Cancelled and not Disbursed

Active Regular

Servicing Balance

Current Balance + Stressed Balance

Stressed Balance Past Due Balance + Delinquent Balance + Deferred Balance + Catch-up Balance

Active Defaults Regular Servicing Balance + Liquidation Balance

Solvency and Financial Condition Ratios

Operating Reserves Reserves for Future Operations / (Total Expenses / 12)

Debt to Asset Ratio Total Liabilities / Total Assets

Commented [A73]: If the CDC does not use loan agents, please remove section

SMART Analytical Review 19 [CDC Name]

Cash to Total Assets

Ratio

Cash / Total Assets

Operating Margin Change in Net Assets / Total Revenues

SMART Analytical Review 20 [CDC Name]

Appendix B

CDC’s Lender Profile Assessment Scorecard and Definitions

The attached Lender Profile Assessment (LPA), as of [date], was used as part of this Review and calculates the SMART metrics discussed throughout the Report.

Commented [A74]: Copy in the Score Card and Definitions tabs. Copy them in as pictures for best resolution. Use two pages – one for the Score Card and one for the Definitions

Please be sure the correct CDC name is included in the right corner

SMART Analytical Review 21 [CDC Name]

Appendix C

Board Member Acknowledgement

The Board Members of [CDC Name] acknowledge receipt of this SMART Analytical Review

Report and the accompanying cover letter to the Report from the SBA Office of Credit Risk

Management dated [REPORT DATE].

Commented [A75]: Use the full name

Commented [A76]: The Board composition matrix should tie to the matrix provided by the CDC. If the Executive Director is not included in the matrix provided by the CDC, he/she should not be listed as a Board member.

If the Executive Director is not a Board member per the matrix, he or she is listed at the end of Appendix C as Executive Director.

CDC Name: CDC FIRS#:

Borrower Name: SBA Loan Number (GP#):

TPL Name: TPL Amt:

SBA Approval Date: SBA Approved Amount

SBA Disbursement Date: Borrower Contribution

SBA Current Balance: Delivery Method:

SBPS (Origination): Date Transferred to Liquidation:

NAICS Code: Purchase Date:

Reviewer Name: Review Date:

Loan Risk Rating at Origination Current Risk Rating

Sources % CDC Servicing Fee

TPL Loan $ - #DIV/0! Closing Date

SBA Net Debenture: #DIV/0!

Borrower Contribution $ - #DIV/0!

Total $ - Balance

Use of Proceeds %

Type (Check Attributes that apply) Status Land #DIV/0!

New Business (<=2yr.) Current Land & Building #DIV/0!

Limited Use Collateral Past Due Construction/Reno #DIV/0!

Franchise Delinquent Equipment #DIV/0!

EPC/OC Deferred Furniture and Fixtures #DIV/0!

ARRA (Recovery Act) In Catch Up Leaseholds #DIV/0!

Active Purchase-Regular Servicing Other1 #DIV/0!

Active Purchase-Liquidation Other2 #DIV/0!

Purchased Total $ - Balance

"CDC's" Collateral Valuation Valuation Method LIQ % Priority Liens$ LIQ Value$

R/E Value: 75% -$

Equipment Value: 50%

Other 1 - Describe

Other 2 - Describe

Other 3 - Describe

Total Collateral:

Collateral Excess/(Deficit)

Actual/Historical

Current Ratio

Working Capital

Debt/Worth

DSCR

Guarantor Name Credit Score Guarantor Name Credit Score Guarantor Name Credit Score

Insert Name 1 Insert Name 4 Insert Name 7

Insert Name 2 Insert Name 5 Insert Name 8

Insert Name 3 Insert Name 6 Insert Name 9

SBA Loan Number (GP#): Exceptions Exception Ratio

0 0 0%

Req. Category Yes/No/N A

1 Eligibility [select one]

2 Eligibility [select one]

3 Eligibility [select one]

4 Eligibility [select one]

5 Eligibility [select one]

SBA 504 LOAN FILE REVIEW WORKSHEET

Google Maps

Value$

Move cursor over this cell to view instructions for filling out Credit Underwriting Narrative

Type Required

0 0

CDC's Financial Ratios/Metrics

Pro-forma

Reviewers: The questions below are posed such that "Yes" responses indicate "in compliance." All questions require a response (Yes, No, or N/A). ADD: Explain specific reason(s) for each exception ("No") in the Comments section.

Question Comments:

El ig ili ty

Business is a for-profit domestic operation?

Size determinations were correct and analyzed according to SBA policy?

Franchise’s SBA eligibility is documented and Franchise documents are fully executed?

Loan file contains written evidence that credit is not otherwise available on reasonable terms?

SBA Form 912 "Statement of Personal History" obtained for all owners, guarantors, and key management (if applicable); if any 912 question answered in the affirmative, proper SBA approval was obtained (explain ANY "No")?

6 Eligibility [select one]

7 Eligibility [select one]

8 Eligibility [select one]

9 Eligibility [select one]

10 Eligibility [select one]

11 Eligibility [select one]

12 Eligibility [select one]

13 Eligibility [select one]

14 Eligibility [select one]

15 Eligibility [select one]

16 Underwriting [select one]

17 Underwriting [select one]

18 Underwriting [select one]

19 Underwriting [select one]

20 Underwriting [select one]

21 Underwriting [select one]

22 Underwriting [select one]

El ig ili

File contains CAIVRS documenting no prior loss to the government?

For PCLP lenders If loan approval prior to 9/30/2012, no CAIVRS required, however the No Prior Loss Statement must be certified by the Borrower. For all others If loan approval prior to 1/1/2014 no

CAIVRS required, however the No Prior Loss Statement must be certified by the Borrower. (Explain any "No" as either not meeting the standard AND/OR not meeting the documentation)?

Principal(s) are eligible citizens or have eligible non-citizen status?

Have all EPC/OC requirements been met? (Explain WHAT conditions are not met with any "No" answer)

No actual or apparent conflicts of borrower and/or lender interest exist?

Loan proceeds were used for eligible business purposes and in accordance with Loan Authorization?

Loan meets loan program-specific eligibility requirements/restrictions for delivery method under which the loan was approved. (Explain any "No" answer with specific requirements not met.)?

Any Project, including 504 Debt Refinance approved after June 24, 2016, meets the required Job Opportunity requirements or is exempt due to meeting Public Policy requirements (i.e. minority, veteran, woman-owned business, etc.)? If the 504 Debt Refinancing Project was approved before June 24, 2016, alternative job retention goal that was authorized by the previous Jobs Act applies.

Relocation out of the community requirements were met?

All occupancy percentage and proceed requirements are met? This question is "Required" whenever loan proceeds are used to acquire, construct/renovate real estate.

Life Insurance determination was documented?

Credit analysis was performed and included repayment ability based on historical income statements and/or tax returns? Completing this question is not required for start ups.

Repayment is justifiably based on projection with reasonableness of assumptions and compared to industry standards?

A ratio analysis of the financial statements including any comments on any…