USDA Business and Industry Guaranteed Loan Program – Noteworthy Revisions For Community Banks

The Business and Industry (B&I) loan program administered by the United States Department of Agriculture (USDA or Agency) guarantees loans by qualified lenders to benefit rural businesses. For eligible projects, community banks can obtain an 80% guarantee for loans up to $5 million, a 70% guarantee for loans between $5 million and $10 million and a 60% guarantee for loans between $10 million and $25 million. The B&I guaranteed loan program allows lenders to expand their loan portfolio, obtain a deficiency guarantee, increase earnings by participating in the secondary market, make loans in smaller communities with traditionally lower collateral values and extend loans above their legal lending limits.

For each loan, lenders submit a detailed guarantee application to the Agency office in the state where the project is located. Approval or denial decisions generally take several weeks. Projects eligible for B&I financing include business acquisitions, commercial real estate purchases, startup costs and working capital, machinery and equipment purchases and some refinances.

On December 17, 2008, the USDA published a new interim rule pertaining to the B&I loan program in the Federal Register. Effective October 1, 2009, the new rule is designed to streamline the application, accelerate the guarantee approval process and expand the types of eligible projects. The Agency ultimately decided to abandon the new rule and instead focus on working within the existing regulatory framework to improve the B&I loan program.

Under the previous rule, the B&I loan program required lenders to compile burdensome applications and to deal with lengthy approval timelines and limited loan features. For example, a common lender complaint has been the laborious guarantee application process. For every loan under the previous regulations, B&I lenders had to submit to the local Agency all of their underwriting and loan approval documents, at least three B&I application forms, the draft loan agreement, copies of loan origination and servicing policies and procedures, and details concerning lending history, experience and their relationship with regulators. The Agency also awarded guarantees on a “priority scoring” basis, which gave loans in particularly rural areas with compelling purposes priority over otherwise eligible loans that earned a lower “score”. An approval or denial decision for lower scoring loans could take months from the application submission.

The USDA aims to reduce these drawbacks with the revised rule. The new rule attempts to streamline the original application process. Lenders must apply to participate in the guaranteed loan program by submitting background information such as descriptions of lending history and experience, policy and procedures and documentation concerning regulatory compliance (7 CFR 5001.9). Although lenders had to submit this information under the old rule, they are now permitted to submit summaries instead of copies of their policies and procedures (§5001.9(a)(1)). Once approved by the agency, lenders will no longer have to submit this background information when applying for loan guarantees (§5001.9(b)(4)). The revised rule also reduces the number of guarantee application forms (§ 5001.12(a)) and eliminates the draft loan agreement (§5001.34). In addition to simplifying the application process, the new rule endeavors to reduce the guarantee approval timeline.

Two changes aim to accelerate the guarantee approval process. The Agency has eliminated its “priority scoring” system in favor of a simpler first-come-first-serve approach (§5001.103(f)(1)). Additionally, the Agency has created a preferred lender program (PLP) (§5001.9(d)). The benefits of obtaining PLP status include a ten day approval or denial decision (§5001.11(c)), a smaller guarantee application package (§5001.12(b)) and the opportunity to obtain preferred status in more than one state with a single PLP application (§5001.9(d)(2)). In addition to streamlining the application process, the Agency has introduced some new loan features to the B&I loan program.

B&I guarantees may now be issued for additional uses and purposes. Under the previous regulations, lines of credit were ineligible. Lines of credit are now eligible when used for annual operating/business expenses, debts advanced for the current operating cycle, scheduled non-delinquent term borrower debt or closing costs (§5001.103(b)(2)(xix)). Projects involving leasehold improvements and the purchase of mixed use commercial and residential buildings are also now eligible for B&I guarantees (§5001.103(b)(2)(xviii, xx)). Another new feature removes the prohibition that interest rates change no more often than quarterly, and allows lenders to set a variable rate that adjusts as often as daily (§5001.31(a)). These new features allow lenders to obtain a valuable B&I guarantee for projects that previously were ineligible.

Although these features are now available to lenders, some revisions to the rule are less clear and useful tools have been eliminated. For example, the Agency has replaced the proposed cash equity criterion with a debt-to-tangible net worth ratio criterion (§5001.6(c)), but has failed to define this calculation other than referring to Generally Accepted Accounting Principles. Additionally, the rule eliminates the Agency’s limited authority to issue 90% guarantees. Again, the Agency ultimately decided to abandon the new rule and instead focus on working within the existing regulatory framework to improve the B&I loan program.

Customer Service In The Service Industry

Service industry depends almost solely on the strength of customer service provided; customers are hard to please one must note. While a natural aptitude in those desirous of joining this industry does help, training is necessary for them to be able to understand priorities of their profession better and develop them into efficient customer care executives.

The training largely makes communication skills better. Higher the level of skills the customer service staffs of a company possess, better the company’s image they create. It is by giving customers efficient service with regard to whatever their queries that the base of loyal customers can be enlarged. Customer service courses are available at most centers and those desirous of pursuing a career in this line will be well advised to take up such a course.

To its customers, a company is assessed mainly by its customer service staff as they create a direct link with the customers. Whether they sit across the table and resolve customer queries or do it on phone, professionalism on their part is highly desirable; of course politeness does go a long way towards customer satisfaction and business growth. In order to ensure that the customers do return to the company for their repeated or fresh needs, it is the treatment meted out to them by the concerned staff that holds the key.

To this end, the employees in this segment must do a course in customer training. By joining these courses, you do get valuable inputs to develop you into an efficient customer care professional. The courses are available in classrooms as well as online. The syllabus of such courses covers areas like identifying the needs of the customer, refrain from talking about matters that do not concern what the customer does not need, common mistakes committed by staff in dealing with customers and lots more.

You must try to make the best use of training material and guidance to rise to leadership level in this line of profession. The realization that the customer is the lord and it is for a customer service official to satisfy him rather than raising unwanted counter queries does sink in when one does a good training course in this line.

The company that you join has certain specific info that you should have while dealing with company’s customers. It is therefore necessary that apart from the training course that gives you general guidance in the line, you need to be further exposed to training by the company that you start working for. Of course, even after you are settled in a new job, you must continue absorbing useful traits from your experienced colleagues.

Taking Advantage of Business Opportunities in the Senior Service Industry

According to a recent United Nations Study, the older population is growing at a faster rate than the world’s total population. It is predicted that by 2050, older persons will make up more that 50% of the populations in western, developed nations, including The United States. As our beloved seniors leave the work force, there are not enough younger replacements. In addition, our need for elder care and senior services is rising faster than we can come up with solutions. Older women outnumber older men by a landslide.

This is not meant to be a doom and gloom report. On the contrary, what I am saying is that where there is a tremendous need, there is also tremendous opportunity for creating new services. Not only are the seniors themselves going to need help; their loved ones will need help and support too.

It’s only going to get bigger.

Right now, a senior and/or their concerned family members have to navigate through a myriad of agencies and referral services to find housing, medical care and ancillary services. Navigating Medicare, Part B can be a real trip down Alice’s Rabbit hole! The adult children of seniors often live far away and/or can’t help.

The opportunity lies in creating a one stop service that will address all the needs of seniors and their families. Companies that create a one stop shopping service where seniors and their families can get all their needs met will be tapping in to an ever growing client base.

What do Seniors need now and what will they need later?

1. Help deciding if they can remain safely in their own home.
2. Knowledge of home safety products available
3. Help finding senior services of all kinds
4. Protection from Elder Care Abuse
5. Help finding affordable housing
6. Someone to help navigate through the government bureaucracy of Medicare and Social Security.
7. Help disposing of unwanted property
8. Social Interaction
9. Protecting their legacy
10. Protecting their finances
11. Keeping in touch with family
12. Transportation
13. Good Health
14. Home Care

There are so many opportunities in the Senior Service industry. While answering the call to help Seniors, we can also create amazing business opportunities too. Ask anyone who works with seniors and they will tell you that it is a truly rewarding experience.

Anyone who works with seniors has realized that many of their needs are just now being acknowledged. Industry has not yet caught up with the market opportunities of this rapidly growing population.

Those already in the senior care industry need to look beyond what they currently offer and expand their services to meet the needs of their clients. Opportunities abound.

Business Service Management – How Your Business Can Benefit From It

Businesses in most of the industries today rely on their IT infrastructure for delivery of their products or services. Despite this, business owners and IT managers face difficulty in figuring out the performance of their IT infrastructure and analyzing how that performance affects their bottom line at any given point of time. If you are wondering the same about your IT infrastructure, the answer to your queries is Business Service Management (BSM). Let’s discuss some aspects of Business Service Management and how it can benefit your business.

What Business Service Management Is

BSM is a way to monitor IT services so that one can understand its impact on the business’ bottom line. Through it, IT managers can monitor application performance so that they can identify, foresee and solve application bottlenecks. In case of larger organizations, the business owners and IT managers need to know which department if going to be affected the most in case of an outage, so that its impact can be minimized. Through BSM, the interests of the business can be protected by monitoring, tracking and managing the investment and operational aspects of the IT department. BSM hence ensures that IT processes are aligned with business processes for the maximum benefit of the business.

How you can use Business Service Management for your business

If your business depends on IT department for providing services or products or your customers, Business Service Management can be extremely useful to you. Even if you have a large company with a huge IT department, a BSM solution can help you undertake effective ITSM. When you have a Business Service Management solution in place, in case of a system failure, you will be able to know exactly where the error has occurred on a real-time basis. You will hence be able to analyze the financial impact of the failure as well as instruct the IT manager of steps to take to ensure that application performance is up to the mark.

Some of the many benefits of a BSM solution for your business are:

  • It ensures application performance is up to the mark at all times
  • BSM also ensures the availability of business-critical applications
  • A BSM solution helps IT managers to ensure that service level agreement conditions are met
  • You can make IT service management easier with a customized BSM solution
  • You can understand the impact of a system failure on your bottom line through Business Service Management
  • A BSM solution will help you avoid downtime of applications by identifying bottlenecks and figuring out their cause
  • Through a BSM solution, you can reduce losses of downtime and improve productivity of your business