Loan Improvement

Loan Improvement

SBA modernizes to help feed its growing programs

BY PATRICIA DAUKANTAS | GCN STAFF

Under a five-year plan for overhauling its information technology systems, the Small Business Administration recently acquired new software for financial and other administrative tasks.

By the time SBA celebrates its 50th anniversary in 2003, agency officials want all their programs up and running around the clock, chief financial officer Joseph Loddo said.

In the first phase of the modernization, the agency has upgraded systems for managing its extensive portfolio of guaranteed loans, chief operating officer Kristine Marcy said.

SBA processed its first electronic loan last November through its Sacramento, Calif., office and plans to add more private lenders during fiscal 2001.

The agency's staffing level has dropped 22 percent over the past eight years, which is another reason to improve IT, Marcy said. Over the past decade, SBA's portfolio of loans to small and disadvantaged businesses has more than doubled to $50 billion.

'We're a small agency with a huge portfolio,' Marcy said. SBA supplies more than half of the U.S. venture capital available each year.

Seventy percent to 80 percent of the loans are booked through a preferred lender program, which involves nearly 7,000 banks, Marcy said. SBA guarantees the loans, just as the government backs student and housing loans.

'The financial and IT businesses were changing so rapidly, we had to make some changes to stay current with the private sector,' Marcy said. Banks had been asking SBA to make faster decisions on loan guarantees. The agency decided to aim for a turnaround time of one hour.


SBA needs small-business partners, not just Oracle.
'Kristine Marcy, SBA chief operating officer
In the second phase of modernization, SBA is revamping its financial, human resources, procurement and travel systems with Web-enabled Oracle Corp. applications.

Online in October

The financial system will use Oracle's U.S. Federal Financials 3.3, which meets the requirements of the Joint Financial Management Improvement Program.

SBA announced the $1.5 million Oracle contract late last year and plans to bring the software online by Oct. 1, Loddo said.

'We need to make sure we are appropriately sensitive to small businesses' and have small-business partners, not just Oracle, Marcy said.

The second-phase integrator, SRA International Inc. of Arlington, Va., has subcontracted with a number of small firms for things such as training and data conversion.

Also, a core team of senior SBA employees has been transferred away from day-to-day tasks to help with the modernization, Loddo said.

In the final phase of the modernization, SBA will upgrade the computers in its 8(a) Business Development Program, which assists small businesses in competing for government contracts, Marcy said. The agency wants to be able to improve its tracking of clients' successes and failures.

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