SBA lends a hand with online loan app

Stephen Kucharski, SBA's chief of financial systems support, says agencies see E-Tran as a model for transferring loan information.

Henrik G. de Gyor

The Small Business Administration gets more than 67,000 faxes a year from lenders seeking small-business loans that add up to more than $16.9 billion.

SBA employees must manually enter the information, delaying loan decisions. But all that faxing, data entry and waiting will likely disappear as lenders begin using SBA's recently launched E-Tran online loan application.

SBAExpress lenders currently account for 54 percent of SBA-guaranteed loans to small businesses. Online loan submissions for other SBA programs will start in the fall.

'This was a grass-roots effort, and we worked with a number of lenders over the last two years to make sure we knew what works best for the community,' said Kevin McCall, senior adviser in SBA's Capital Access Office. 'This is one part of how we are centralizing our services to lenders.'

SBA has applied industry best practices to managing loan processes in two of its main programs, McCall said. The agency has centralized purchasing and liquidation processes for its 7a loans, as well as centralized fixed-asset and fixed-financing processes for its 504 loans. Over the past year, the back-office functions for the two programs have converged.

SBA also has worked with the Education Department on the E-Loans e-government project to improve reporting by systems that conduct business-to-government transactions.

Stephen Kucharski, SBA's chief of financial systems support, said agencies are looking at E-Tran as a model for transferring loan information from lenders to the government.

Besides reducing workloads for lenders and SBA employees, E-Tran will improve data accuracy and consistency, McCall said.

Lenders currently access E-Tran on the Web, but eventually vendors of bank loan software will integrate the function into their applications, McCall said.

A lender logs in with a user name and password, which is checked against SBA's Partner Identification Management System. The lender then fills out online application forms and submits them. SBA reviews each form and makes a decision almost immediately, McCall said.

SBA and a contractor team developed E-Tran using ColdFusion from Macromedia Inc. of San Francisco. Loan applications reside in a Sybase Inc. database, which McCall said eventually will become a data warehouse.

Vendors to lenders

The developers also created Extensible Markup Language schemas that can be incorporated into vendor software.

'In the past, vendors wrote the software, and lenders printed out the forms and faxed them to SBA,' Kucharski said. 'Once the lenders have the application, the system will transfer the data to us using the XML schemas.'

SBA said Bankers Systems Inc. of St. Cloud, Minn., will be the first vendor to integrate E-Tran into its software. More than 12,000 banks and other financial institutions use the company's software. Lenders of any size can benefit, McCall said. Besides the secure Web portal and eventual software integration, SBA maintains a site where small banks can make loan applications one at a time.

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