SBA getting new loan management system

The Small Business Administration is implementing a loan monitoring system that includes a new risk-assessment rating tool.

SBA awarded a five-year, $9.8 million contract to Dun and Bradstreet Corp., a financial solutions provider, in association with Fair Isaac Corp., an analytics technology provider.

The loan monitoring system with the rating tool is intended to give SBA, which oversees about 197,000 loans, a better understanding of the risks involved with lenders and lending programs.

"SBA loans are ones lenders wouldn't make under their own criteria," said Janet Tasker, SBA's associate administrator for lender oversight. "Our loans are in the gray area anyway. There are probably some credit concerns. This gives us a numerical rating on a loan."

Dun and Bradstreet and Fair Isaac are customizing analytic products currently used by banks and creditors to monitor customer credit profiles. "The model they are bringing is one they use in the industry now. It's an established system," Tasker said.

SBA has been tracking lender performance and rate trends and conducting oversight reviews through the Office of Lender Oversight for about three years. Under this contract, those disjointed systems will be consolidated and the credit quality assessment tool will be added.

Borrowers likely will be unaffected by the shift, but the rating tool may impact lenders' relationships with SBA, Tasker said. However, she said she does not anticipate a large number of poor lender ratings.

"This is for our own management purposes," Tasker said. "We're going to establish a baseline, and we can roll this program out [to assess] the programs and the lenders."