Windsor Advantage's Q&A Corner

SBA Notes of Interest

By Connor Mulvey, Windsor Advantage

Post-COVID and SBA Underwriting Today

SBA Underwriting has changed since COVID and as a result, many lenders are wondering what is prudent lending in the eyes of the US Small Business Administration. We have received a few questions on how best to approach SBA borrowers today.

1. What areas of underwriting does the SBA consider relevant today versus two years ago?

In your credit memo, you must address the impact any other loans (PPP, EIDL) could have on the cash flow. Many have focused on 2019 versus 2020 in this analysis.

2. What impact has COVID and the Delta Variant had on the business?

Analysis today must focus on management’s ability to adjust and compensate for any reduction in revenue, supply chain management or staffing considerations. Even some of the most stable businesses have been impacted. We encourage you to discuss any restrictions that have impacted the borrower’s cost projections, access to supplies or inventory. The SBA has a COVID questionnaire that you should continue to utilize, especially with the increased uptick in infections.

3. What industries have experienced the greatest negative impact from COVID?

• Event Planners

• Live Venues

• Fitness Centers

• Day Cares

• Spas & Salons

• Office Furniture

• Full-Service Restaurants, Bars

• Pet Boarding

4. What industries have had limited negative impact from COVID?

• Dentists

• Medical Practices

• Pharmacies

• Auto Repair

• Gas Stations & Convenience Stores

5. What industries have had the greatest success?

• Professional Services

• Insurance

• Funeral Homes with crematoriums

• Grocery Stores / Liquor Stores

• IT Services

• Construction/Landscaping

• Veterinarians

• Amazon Storefronts

• Home Healthcare

• HVAC & Plumbing

Post COVID, underwriting requires more communication with your borrower than ever. You must evaluate how they have managed the stress resulting from COVID. Spend time with them and understand how they have survived. You will have fewer problems in 2022.

Windsor Advantage is the nation’s largest SBA Lender Service Provider and assists lenders nationwide in processing, closing, servicing and liquidations.

For more information, please contact Connor Mulvey, Vice President– Business Development Windsor Advantage, LLC, 444 N Wells St., Suite 201, Chicago, IL 60654 P: 312-585-6596 C: 708.408.1820