February 27, 2018

Fiscal Year 2019 President's proposed budget departure from past

NAGGL experts have been digesting the proposed FY 2019 budget and will provide detailed written analysis in coming weeks. It is important to recall that this is a proposed budget; it is the job of congressional authorizers and appropriators to carefully review and finalize the budget over the next many months. A few key proposals:


• $30 billion 7(a) authorization cap
• Increases maximum ongoing fee from 0.55% to 0.625%
• Sets the ongoing fee at 0.55% for loans less than $1 million and at 0.625% for loans $1 million or greater
• Eliminates all borrower fee waivers not required by law (e.g., veterans SBA Express)
• Increases the upfront (borrower) guaranty fee on loans $1 million or greater
• Introduces a secondary market fee up to 0.05% per year of outstanding balance of loans sold
• Increases SBA Express limit to $1 million


These and other proposals indicate a major philosophical shift from previous Administrations' budgets, some of which are troubling to NAGGL. The budget's goal to increase fees in order to create additional revenues of up to $155 million to offset the SBA’s salary and expenses associated with its credit programs by taking the program to a negative subsidy is of note. But, please, Stay Tuned & Stay Engaged -- there is a LONG road of analysis and discussion ahead before anything in the proposed budget becomes a reality. NAGGL has already begun discussions with The Hill on the FY 2019 budget. NAGGL, as always, is on top of it and remains your source for credible information!

FY 2019 President's PROPOSED Budget
https://www.whitehouse.gov/omb/budget >
Small Business Administration Budget Proposal >
More >
Loan Guarantees: Subsidy Rates, Commitments, and Average Loan Size >
Loan Guarantees: Assumptions Underlying the FY 2018 Subsidy Estimates >
Loan Guarantees: Assumptions Underlying the FY 2019 Subsidy Estimates >
Loan Guarantees: Subsidy Reestimates >
Loan Guarantee Program Disbursement Rate Assumptions Underlying the 2019 Subsidy Estimates >

Updated Instructions for electronic submission of Form 159 7(a)
SBA has asked us to provide this information: Lenders must submit SBA Form 159 7(a) to Fiscal Transfer Agent (“FTA”) on loans that involve payment of fees, including, but not limited to, those covering any packaging fees charged by the Lender or where the Lender paid the Agent fee. This submission is required only once after there has been an initial disbursement on the loan and should be submitted in conjunction with a Lender’s 1502 report for the month. The information must be submitted by electronic document imaging utilizing either the Portable Document Format (.pdf) or the Tagged Information Format (.tif). Lenders must email file to Form159@colsonservices.com.

Remember that Lenders must retain the original document in the loan file for compliance review purposes. Hard-copy records of documents requiring original signatures (including SBA Form 159(7a)) must be retained unless the original signature was made electronically in accordance with applicable standards governing electronic signatures. (See Appendix 11 of SOP 50 10 5(J) for guidance on electronic signature standards.)

Revised Forms 1919 & 1920 reflect 50 10 5(J) changes 
Lender's Application for Loan Guaranty (expires 7/31/2020) >
Borrower Information Form (expires 7/31/2020) >

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