New government rules to make small business lending faster and easier are getting a boost from one of the industry's leading compliance software providers.
CFI ProServices Inc., Portland, Ore., unveiled a product this week to help bankers take advantage of an SBA decision allowing lenders to use laser-printed closing documents. Until now, these forms had to be typed manually.
"It's a matter of moving into the computer age," said Michael Stamler, an SBA spokesman. Final rules are expected from the government by the spring of 1995.
Matthew Chapman, chief executive of CFI, said the SBA's decision will speed up the loan process and reduce errors.
"Bankers will be able to make SBA loans quicker," Mr. Chapman said. "We think we can save lenders a lot of grief."
Laser Pro SBA allows lenders to input loan procedures on stand-alone or networked personal computers and to generate SBA loan documents on laser printers. The software costs $3,500.
In developing the product, CFI met with SBA officials, including former administrator Erskine Bowles, and bankers who were unsatisfied with the current process.
It took four years of meetings, said Mr. Chapman, but the SBA finally decided it would help save money and time to let lenders produce documents using a laser printer.
"Until now, we have had to rely upon 1970s technology to complete SBA loan closing documents," said David Bartram, executive vice president of Bank of Commerce, San Diego.
"That creates substantial delays for us because the rest of our loan process is automated."
Mr. Bartram said Laser Pro SBA will help his $170 million-asset bank not only make loans faster, but reduce paperwork mistakes.
"Because the new product incorporates regulations in each state, it ensures that our SBA documents comply with all the appropriate state laws," Mr. Bartram said.
Another good reason for the change, said Mr. Chapman, is the important role small business lending is expected to have in the final Community Reinvestment Act reform.
"Within the CRA world, the best reinvestment is in small businesses," Mr. Chapman said. "That's where banks can make the most money."
SBA loans are on the rise. More than 6,000 lenders make small business loans, and the number of SBA loans increased 40% to 36,500 during the agency's 1994 fiscal year.
Guaranteed SBA loans outstanding currently total $8 billion.