The U.S. Small Business Administration has chosen Wells Fargo (WFC) as the servicing agent for its 503/504 loan program, replacing Bank of New York Mellon (BK), which had the job for the past 20 years.
The five-year contract to service a portfolio of $23.6 billion, including more than 57,000 small business loans, began Sept. 3. Wells said in a press release Monday that it had created a joint partnership with the accounting firm PwC US to manage the receipt of payments, processing of disbursements, and fees associated with the program.
Both Wells and PwC will be jointly responsible for investor reporting on debentures, government reporting on portfolio statistics and document review of new originations. The SBA's 503/504 program grows by roughly 7,000 loans a year, Wells said.
"They were interested in Wells because of our robust technology and the personnel we were able to dedicate to this program," Shana Stephens Murray, a vice president of corporate trust services at Wells, said Monday.
PwC has created a team in Columbia, Md., to administer the loans. The team will report to Brian Bartlett, Wells' head of corporate trust services.
The 503/504 loan program is available to nonprofit certified development companies that are set up to provide real estate financing to small businesses within their geographic markets. CDCs work with traditional lenders, including banks, to finance projects and the SBA will offers guarantee on the CDC's portion of the loan. There are about 290 CDCs nationwide, according to the SBA.