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Windsor Outlook: Increased Lender Sophistication Continues to Drive SBA and USDA Loan Growth

Published on February 3rd, 2016 by Shawn Andrews in Company Updates

Inaugural Report Recommends Industry-Wide Risk Mitigation Imperative

CHICAGO, Feb. 3, 2016 — Increased lender sophistication drove SBA and USDA loan growth last year and will continue to be a major factor in 2016, according to the inaugural SBA and USDA loan market outlook published today by Windsor Advantage, LLC.

“The SBA and USDA loan market has become increasingly competitive,” said Shawn Andrews, managing director for Windsor Advantage. “This requires that participating lenders increase their strategic and technological sophistication to remain relevant.”

SBA and USDA loan approvals reached a record level in FY 2015, with more than 63,000 7(a) loans totaling $23.8 billion. This 23% increase in the total dollar volume of loans represents the third consecutive year of loan growth through the 7(a) program. While economic growth and SBA and USDA program changes may be responsible for driving some of the increase in volume, the firm believes much of this sustained increase is more likely due to the increasing sophistication of SBA and USDA lenders.

The increased SBA and USDA loan volume comes at the same time as recession expectations have risen among many economists, according to the report. “To build a scalable and sustainable SBA and USDA lending platform, a lender must first define its strategy and then implement well-designed processes and sufficient technology to control risk, both for SBA compliance and resilience through the next downturn” states Andrews.

The Office of Credit Risk Management (OCRM) within the SBA is reviewing market dynamics for areas of increased risk exposure. While OCRM will identify program-wide portfolio risk, the Windsor outlook report recommends that lenders internally reassess risk and compliance controls across SBA and USDA lending processes at the lender-level, with a focus on certain functions. In 2016, the functions to prioritize are strategy, closing and intensive servicing. Additional focus should be placed on processing, secondary market sales, servicing and regulatory compliance.

The full report is available at WindsorAdvantage.com/research/2016-sba-loan-market-outlook.

About Windsor Advantage, LLC

Windsor Advantage is a leading lender service provider to banks and credit unions participating in Small Business Administration (SBA) loan programs. Windsor offers an outsourced SBA and USDA department focused on the development and implementation of innovative lending strategies.

Windsor provides a comprehensive SBA and USDA loan department to lenders nationwide. Services include prequalification, loan structuring, application processing, loan closing, secondary market sales, loan servicing, SBA compliance and regulatory exam support. Windsor also provides continuing training and technical assistance to lenders at no cost.

With more than 100 years of collective SBA and USDA lending experience, cutting edge systems and rigid controls, Windsor Advantage is uniquely qualified to support its clients to develop and execute a thoughtful and profitable SBA 7(a) and USDA loan program. Windsor Advantage is based in Chicago, Illinois, with offices in Indianapolis, Los Angeles and Boston. For more information, call 312-724-6425 or visit WindsorAdvantage.com.


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