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lender status is based on experience. Banks can achieve the designation by building up a track record for doing loans in both
quality and quantity. Usually, it takes about two years to become a PLP, according to Esquivel.
He says another thing that has helped boost loan volume is the SBA has made the programs more streamlined and easier for
banks to deal with.
"Our programs have gotten easier to use, especially with the Express Loan Program, allowing them to use their own
documentation and also letting them make their own credit analysis," Esquivel said. "Before, we looked behind them and did a
second review of the loan analysis. Under the PLP and Express Loan Program, they (bankers) have the unilateral authority to
make those decisions."
The idea, according to Esquivel, is to make banks more of a partner in the process and depend on their expertise in
evaluating credit. "They have established credit policies and a full staff to do the lending," he said. "It's what they do
best."
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The SBA regularly audits those credit policies and reviews performance before renewing a bank's PLP status.
Another factor leading to the record-setting volume, Esquivel says, is that the SBA made some changes in the Express Loan
Program, increasing the limit from $250,000 to $350,000 and opening it up to all banks - not just PLP lenders.
Associated Bank is one of Illinois' top SBA lenders; the financial institution made $11.438 million in SBA loans in the
state in FY2005. Eric Forguson is the vice president of business banking for Associated Bank; he oversees SBA loans in the
Southwestern Illinois market.
As a PLP lender, Associated can approve Express Loans in-house.
"We actually go online and get our authorization number based on our internal approval and process the loan from there on
out, so we don't even have to go directly to the SBA on the Express Loans," Forguson said. "The Express Loan Program that
offers a 50 percent guarantee is great for some credits that fall just outside of conventional underwriting standards. That's
a very nice way to offset risk and accommodate new borrowers or specific situations," he added.
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