1. SBA Form 1502 Reporting and Servicing Loans Sold
29th Annual Wisconsin Lenders Conference
Christopher Anthony
BNY Mellon, Colson Services
May 10, 2018

2. When SBA Form 1502?
Lenders must provide a monthly report for all of its SBA 7(a) guaranteed loans, regardless of whether the borrower made a payment in the current month.
Loan reporting in a current month reflects borrower payments received or omitted in the prior month.
The due date is the third calendar day of each month, or the next business day thereafter if the third calendar day of the month is not a business day, plus a two business day grace period.

3. SBA Form 1502 Reporting Components
Guaranty Loan
Status Information
SBA Ongoing
Servicing Fee
Secondary
Market Payment
SBA
FORM 1502

4. OMB No.
Expiration Date
Guaranty Loan Status & Lender Remittance Form F
Check box if secondary market payment O
reported is a late payment or prepayment L D
Month Ending:
Guar. Portion
Closing
Balance
Remittance
Penalty
(if any)
Interest Period
# of
Days
Calendar
Basis
From To
Total:
$0.00 A B 1 2 6 5 4 3 10 9 8 11 12 16 15 14 13 7 17 19 20 18

5. SBA Form 1502 Reporting
Calculation performed by FTA for loan currency (Status Codes 1, 2 and 3)
Effective Mid-March 2017, All Loans:
Primary : Next Installment Due Date
Secondary: Interest To date (only in absence of Primary)
May (Month-end April 2018) Reporting
Calculation
Status Codes 1 2 3
Next Installment Due Date
May 2018
April 2018
<= March 2018
Interest To Date
March 2018
<= February 2018
Source: Colson Services Corp., SBA Fiscal Transfer Agent

6. SBA Ongoing Servicing Fee
Fee Rate Calculated by Lender on Unsold Guaranteed Portion.
Fee Rate calculated by Colson on Sold pass-through interest.
Affected Population
SBA 50 Basis Point Fee (.0050)
7(a) loans approved 10/12/95 thru 09/30/02
SBA 25 Basis Point Fee (.0025)
7(a) loans approved 10/01/02 thru 04/04/04
STAR loans
SBA 36 Basis Point Fee (.0036)
7(a) loans approved 04/05/04 thru 09/30/04
7(a) loans approved 10/01/04 thru 09/30/05
SBA 54.5 Basis Point Fee (.00545)
7(a) loans approved 10/01/05 thru 09/30/06
SBA 55 Basis Point Fee (.0055)
7(a) loans approved 10/01/06 thru 09/30/07
SBA 49.4 Basis Point Fee (.00494)
7(a) loans approved 10/01/07 thru 09/30/08
7(a) loans approved 10/01/08 thru 09/30/13
SBA 52 Basis Point Fee (.0052)
7(a) loans approved 10/01/13 thru 09/30/14 AND Gross Approval Amount > $150,000
7(a) loans approved 10/01/13 thru 09/30/14 within 90 days of companion loan(s) AND takes gross aggregate > $150,000
SBA 51.9 Basis Point Fee (.00519)
7(a) loans approved 10/01/14 thru 09/30/15 AND Gross Approval Amount > $150,000
7(a) loans approved 10/01/14 thru 09/30/15 within 90 days of companion loan(s) AND takes gross aggregate > $150,000
SBA 47.3 Basis Point Fee (.00473)
7(a) loans approved 10/01/15 thru 09/30/16 AND Gross Approval Amount > $150,000
7(a) loans approved 10/01/15 thru 09/30/16 within 90 days of companion loan(s) AND takes gross aggregate > $150,000
SBA 54.6 Basis Point Fee (.00546)
7(a) loans approved 10/01/16 thru 09/30/17
7(a) loans approved on or after 10/01/17
Zero Fee
7(a) loans approved 10/01/13 thru 09/30/2016 AND Gross Approval Amount  $150,000 (single loan or within 90 days of companion 7(a) loan(s) AND gross aggregate  $150,000)

7. SBA Ongoing Servicing Fee
Two calculations for the SBA Ongoing Servicing Fee:
For term loans, SBA's basis point fee calculation:
[Guaranteed Portion Opening Balance] x [fee rate]  [Calendar Basis] x [# of days]
For revolving loans or term loans with multiple disbursements, SBA's basis point fee calculation:
[Guaranteed Portion Interest Amount] x [fee rate]  [Note Rate]

8. Settlement Settlement
Secondary Market Loan Settlement
1086 &
Copy of Note
Sells Guaranteed
Portion of Loan
Broker/Dealer
or Investor
Lender
Delivered within
2 business days
Settlement
(same day turnaround)
1086 &
Copy of Note
FTA
Settlement

9. 7(a) Secondary Market Primary Loan Sales Borrower Lender SBA Form 1502
FTA
Investor

10. Secondary Market Payment Total to FTA - Guar. Portion Pymt
Borrower’s Payment
Gross Interest (Note Rate) +
Gross Principal
Unsold 1502 Reporting
Guar. Portion Interest (Note Rate)
Guar. Portion Principal
Retained by Lender ≠ 1502
Unguaranteed Interest (Note Rate)
Unguaranteed Principal
(retained by lender)
Secondary Market
Lender Servicing Fee
Sold 1502 Reporting
Guar. Portion Interest (Sold Rate)
FTA

11. Borrower Late Payments
SBA Form 1086, Paragraph 6, b. :
“With the exception of prepayments pursuant to Paragraph 15 of this Agreement, payments received other than as regularly scheduled in the previous month must be remitted by Lender to FTA within two (2) business days of receipt of collected funds.”
Separate SBA Form 1502 required
SBA SOP 50 57, Chapter 4, Paragraph A, 1.a: “Funds from payments received on loans in regular servicing status must first be applied to interest accrued to the date the payment was received;”

12. Secondary Market Payment Modifications
Lender may approve one payment deferment for up to three consecutive months without obtaining prior approval from registered holder
Lender must notify FTA of any such deferral
No change in repayment terms other than the initial deferment may be made by the lender or SBA without the prior written consent of the registered holder through the FTA
Registered holders have up to 30 days to respond to all requests. Lack of response will be considered a denial.

13. SBA Form 1502 Reporting Not as easy as 1 – 2 – 3

14. SBA Form 1502 Reporting One hundred percent reported
Single, adj., one only
Access the 1502 Dashboard ( ) with Colson Single Sign-On credentials
1502 Dashboard should be the singular method for lenders to correct 1502 Lender Remittance Exceptions
Call , Call Option 1 for questions about SBA Form 1502 reporting or SBA’s On-going Servicing Fee

15. 1502 Dashboard – Reporting Summary View

16. 1502 Dashboard – Loan Level History

17. 1502 Dashboard – Loan Level Edit

18. 1502 Dashboard – e-File Submission
Create 1502 e-File
Upload 1502 e-File
Map non-conforming Lender files to mandatory OMB SBA Form format
This step is not necessary if using Colson’s 1502 Fee Calculator
the following Colson representatives for setup assistance:
Kathy-Anne Spence-Nelson:
Osarys Rodriguez:
Angel Suarez:
Browse and select the file you would like to upload
Option to select multiple worksheets for processing
Ability to view uploaded file for format exceptions prior to submission
Verification of file Grand Total ($)
Safe and secure submission method to replace non-STP secure s
Note: Colson accepts Transport Layer Security (TLS) transmissions as another secure alternative
Source: Colson Services Corp., SBA Fiscal Transfer Agent

19. SBA Form 1502 Reporting – FTA Lender Exceptions Top 5 FTA Lender Exceptions (Monthly Avg or Max Loan Count > 1,000)
FTA Code (SBA Code)
Description
Condition
Action Steps
2 (1035)
*Top 5 Exception*
SBA's System will not update subject loan. Guaranteed Portion Closing Balance must be greater than zero.
The Guaranteed Portion Closing Balance = $0.00.
Update the correct Guaranteed Portion Closing Balance for every line of 1502 reporting
Update Status Code 6 if the loan is Paid In Full
Update Status Code 9 with the gross approval amount as the Amount Undisbursed on Total Loan if the loan has never been disbursed
Verify the loan is classified as a line of credit on E-Tran if reporting a temporary pay down to $0.00
Source: Colson Services Corp., SBA Fiscal Transfer Agent

20. SBA Form 1502 Reporting – FTA Lender Exceptions
FTA Code (SBA Code)
Description
Condition
Action Steps
13 (1011)
*Top 5 Exception*
This is a courtesy message that SBA's System shows this loan as Cancelled, Paid-in-Full, Charged Off or Sold in Asset Sale. Cancelled loans may be due to the expiration of SBA's guaranty. Discontinue reporting if the loan is no longer active. If the loan is active, contact your SBA Servicing Center.
SBA’s database indicates that the loan guaranty is no longer active.
If the guaranty is inactive, remove loan from future 1502 reports
If the guaranty should still be active, contact the SBA center to potentially reinstate the loan
Note – Volume is increased due to common lender practice to continue to report on loans until this “confirmation” code is generated
14 (1042)
SBA's System will not update for subject loan. Outstanding balance plus amount undisbursed exceeds the net approval for loan. Please ensure the closing balance reported is for the guaranteed portion of the loan.
The total outstanding loan balance + amount undisbursed > SBA’s gross approval amount
Update the correct Guaranteed Portion Closing Balance
Update the correct Amount Undisbursed on Total Loan
Verify E-Tran matches lender records for SBA Guaranty Percentage and Approval Amount
Source: Colson Services Corp., SBA Fiscal Transfer Agent

21. SBA Form 1502 Reporting – FTA Lender Exceptions
FTA Code (SBA Code)
Description
Condition
Action Steps
17 (1030)
*Top 5 Exception*
This is a warning message that Guaranteed Portion Principal was not reported and the Guaranteed Portion Closing Balance was reduced from the last balance accepted by SBA. Please provide the Guaranteed Portion Principal to reduce the closing balance or if the reported closing balance is unchanged from the prior 1502 report, access SBA E-Tran Servicing/1502 Info to review loan rejection errors (ERR) triggered by prior reporting that prevented the loan balance to update.
The total outstanding loan balance < E-Tran loan balance and Guaranteed Portion Principal = $0.00.
Possible causes:
Guaranteed Portion Principal was not reported
Incorrect Guaranteed Portion Closing Balance reported
Prior 1502 reporting rejected on SBA CAFS due to errors (Err)
Update the correct Guaranteed Portion Principal
Update the correct Guaranteed Portion Closing Balance
Review E-Tran’s E-Lend Servicing/1502 Info to avoid reporting errors (Err) that prevented previous balance(s) from being accepted
Source: Colson Services Corp., SBA Fiscal Transfer Agent

22. SBA Form 1502 Reporting – FTA Lender Exceptions
FTA Code (SBA Code)
Description
Condition
Action Steps
21 (1048)
*Top 5 Exception*
SBA will not update this record since SBA's System shows this loan as Approval Fully Undisbursed. If the loan is Fully Undisbursed, please report a Guaranty Service Status Code 9; otherwise an Amount Disbursed this Period on Total Loan must be provided.
Lender reported loan as Current, Past Due or Deferred. However, SBA’s System still shows the loan as Approval Fully Undisbursed.
If the loan is Fully Undisbursed, update the Status Code to 9 and provide the gross loan approval amount as the Amount Undisbursed on Total Loan
If the loan has been disbursed, update the Amount Disbursed This Period on Total Loan
Source: Colson Services Corp., SBA Fiscal Transfer Agent

23. SBA Form 1502 Reporting Status Code 5 In Liquidation
Reporting Status Code 5 updates a loan to In Liquidation Disbursed status
Removing Status Code 5 from your report Does Not remove a loan from In Liquidation Disbursed status
FTA Exception Code # 16 SBA’s status shows loan in liquidation. Must report loan with a Status Code 5.
Top 7 FTA Lender Exception
Occurrences may increase mid-reporting cycle if loan is placed into In Liquidation Disbursed status via ETRAN
Source: Colson Services Corp., SBA Fiscal Transfer Agent

24. SBA Form 1502 Reporting Zero or No Payment Received on an Unsold Loan
SOP (I): “if no payment was received, compute the fee based on the product of a monthly on-going fee factor times the last reported Guaranteed Portion Closing Balance. This on-going fee factor is either one twelfth of the annual service fee, or a daily fee factor times the number of days in a reporting month.”
Paragraph excluded from SOP (J), but on- going fee remains the responsibility of the lender.
Select 1502 Field Examples
Borrower Payment on April 1st
No Borrower Payment on May 1st
Borrower Payment on June 1st
GP Number
Next Installment Due Date
5/1/2016
7/1/2016
Guaranteed Portion Interest $$
0.00
$$$$
Guaranteed Portion Principal
$$$
Total To FTA $
Interest From
3/1/2016
4/1/2016
Interest To
6/1/2016
# of Days 31 30
Calendar Basis
Act/365
Guaranteed Portion Closing Balance
$$$,$$$
$$$,$$$ (same as Month-end April)
$$$,$$$ (less Guaranteed Portion Principal)
Source: Colson Services Corp., SBA Fiscal Transfer Agent

25. SBA Form 1502 Reporting
Zero Balance Reporting – Revolving Loans Temporarily Paid to Zero
Do not report Status 6 (Paid in Full) or Status Code 9 (Fully Undisbursed) when the borrower temporarily pays the line balance to $ Leave Status blank.
FTA Exception Code # 20 This is a courtesy message that the SBA guaranty will no longer exist on this loan, as it has been reported Paid-in-Full. If reported Paid-in-Full in error, please verify the loan status on SBA ETRAN’s E-Lend Servicing and contact the appropriate SBA Servicing Center to possibly reinstate the loan, as necessary.
Top 6 FTA Lender Exception
Do not add principal repayments back to the Amount Undisbursed reported on the
SOP 50 10:
“[Revolving loans - once the first disbursement takes place, the loan must not be reported as Status Code 9 again, as long as the loan is outstanding, even in instances where the full amount of the credit line is repaid by the Borrower. Do not restore any balance to the Undisbursed Amount once loan disbursements have begun.]”
Source: Colson Services Corp., SBA Fiscal Transfer Agent

26. SBA Form 1502 Reporting Do Report: Do Not Report:
Zero Balance Reporting – Paid In Full Loans (Status Code 6)
Do Report:
Do Not Report:
Status Code 6 when the loan is paid in full by the borrower (guaranty will no longer be active)
Correct Guaranteed Portion Principal
Ongoing Servicing Fee for unsold loans
Interest To date as of the payoff date
Guaranteed Portion Closing Balance of $0.00
Next Installment Due Date with a Status Code 6
Status Code 6 when the loan has been transferred to another lender. Report Status Code 7.
Source: Colson Services Corp., SBA Fiscal Transfer Agent

27. SBA Form 1502 Reporting Zero Balance Reporting – Secondary Market Payoff
Lender is required to provide ten (10) business days notification to the FTA for secondary market prepayments
Notifications can be forwarded to The auto response should be retained by lender.
The 10 business day notification is valid for 30 calendar days from the prepayment date.
The 10 business day notice must include: SBA loan number and borrower name; prepayment date; principal amount being prepaid; the accrued interest due the FTA as of the prepayment date.
Lender is required to provide a prepayment certification that the prepayment funds are either the borrower’s own funds or funds borrowed by borrower pursuant to a separate transaction
The prepayment certification form does not satisfy the 10 business day notification requirement and should only be used when the lender transmits to the FTA the Registered Holder’s pro rata share of the payoff.

28. SBA Form 1502 Reporting
1502 Forms are due at the FTA on the third calendar day of the month, or the next business day if the third is not a business day. The SBA allows a grace period of two business days after the due date.
Biannual, adj., occurring twice or two times a year
1502 online user re-certifications are initiated mid-January and mid-July each year
Method
Payment Method (Secondary market and SBA fee payments)
Send To
(MS Excel or ASCII Comma Delimited formats)
Wire
Web Site - The Connection
Web Site - The Dashboard / e-File
Contact Colson Client Service at (877) , Call Option 1 for information on web enrollments.

29. SBA Forms 1502 & 159 Submissions
Thank you!
Follow-up questions:
Call Option 1 SBA Form 1502 Reporting Questions
Call Option 2 Lender Secondary Market Questions
SBA Forms 1502 & 159 Submissions