SBA OCA Rapid Improvement Campaign I by gjmpzlaezgx

VIEWS: 11 PAGES: 83

									 U.S. Small Business Administration (SBA)
 Office of Capital Access


7(a), SBAExpress and 504 Loan
Servicing, Liquidation and
Purchase


RAPID IMPROVEMENT CAMPAIGN I


Leadership Jumpstart Event Report
December 15, 2006




                       Proprietary & Confidential – Copyright 2006 ICOR Partners LLC. Do not replicate or use without explicit written approval
Contents

I.     Recap of Campaign Background and Charter
II.    Leadership Jumpstart Event Participants and Process
III.   Executive Summary
IV.    Incoming Participant Perspectives on Change
V.     Understanding the OCA Loan Processing Performance System
        –    End-to-End “As Is” Performance System
        –    Breakdown of Loan Portfolios: 7(a), Express, 504 and Recovery
VI.    7(a) Loan Process
        –    Value-Stream Map
        –    Process Efficiency Analysis & Breakthrough Opportunity Size-Up
        –    Breakthrough Vision for Change & Redesign Process Map
VII.   SBAExpress Loan Process
        –    Value-Stream Map
        –    Process Efficiency Analysis & Breakthrough Opportunity Size-Up
        –    Breakthrough Vision for Change & Redesign Process Map




                                                                              2
Contents (Cont’d)

VIII.   504 Loan Process
         –    Value-Stream Map
         –    Process Efficiency Analysis & Breakthrough Opportunity Size-Up
         –    Breakthrough Vision for Change & Redesign Process Map
IX.     Asset Recovery Process
         –    Value-Stream Map
         –    Process Efficiency Analysis & Breakthrough Opportunity Size-Up
         –    Breakthrough Vision for Change & Redesign Process Map
X.      Summary
         –    Productivity Gain Projection
XI.     Improvement Opportunity Portfolio Recommendations
         –    7(a), SBAExpress, 504, Asset Recovery, and Enterprise-Wide Improvement Opportunity Portfolios
XII.    Rapid Improvement Campaign I Action Plan
         –    Overview
         –    Proposed Rapid Action Team Charters and Assignment
         –    Proposed Project Leadership Decision Projects and Assignments
         –    Proposed Campaign Calendar and Milestones




                                                                                                              3
Foreword – Why Change?




     “We are impressed with the people at SBA. The
     agency has become customer oriented and it’s
     clear that SBA wants a successful partnership
     with lenders…But we want consistent,
     reasonable, and timely service across the SBA.
     We should know what to expect and when to
     expect it based on predictive processes and
     consistent quality.”
                                    - SBA Lender Partner




                                                           4
Rapid Improvement Campaign I Charter


               Align OCA and other key stakeholder organizations on the
               breakthrough vision and high priority improvement opportunities for
               achieving a minimum 25% improvement in loan processing
   GOAL
               performance in fiscal year 2007.


               –   Elimination of non-value adding activities that frees up more staff
                   time for proactive customer service.

               –   More transparent, clear accountability and ownership of
  SUCCESS          performance – both loan portfolio and loan processing.
  METRICS
               –   Speed in driving improvement recommendations into action.



                                                           Show measurable
               START: November 28, 2006                    improvements by:
                                                             March 31, 2007
  CALENDAR
 COMMITMENTS



                                                                                         5
Rapid Improvement Campaign I Charter (Cont’d)



   EXPECTED       Streamlined processes for servicing, liquidating and purchasing loans
   CHAMPAIGN       consistent across Processing Centers.
    OUTPUTS
                  Scorecard for linking and tracking loan portfolio and loan processing
                   performance.

                  Reduction in all processing backlogs.

                  Simplified, risk-adjusted SOPs that promote both efficiency, customer
                   service and compliance.

                  Proactive customer service that anticipates resources and prevents
                   problems before they happen.




                                                                                           6
 Leadership Jumpstart Event Participant List

          CAMPAIGN SPONSORS:                                    CAMPAIGN EXECUTIVE BOARD MEMBERS:
         Steve Preston     Steve Galvan                                Mike Hager       Jim Hammersley
         Mike Hager        Christine Liu                               Janet Tasker     Bryan Hooper
         Mike Pappas       Janet Tasker                                John Miller      Katy Ballenger
         Jenni Main

                                      JUMPSTART EVENT PARTICIPANTS
            Mike Hager, OCA HQ                               Dick Blewett, NGPC
            Janet Tasker, OCA HQ                             Dana Relyea, NGPC
            Jim Hammersley, OFA HQ                           Graciela Gatell, NGPC
                                                             Hazel Zackery, NGPC
            John Miller, OCA HQ                              Rick Geyer, NGPC
            Walter Intlekofer, OFA HQ                        Vanessa Piccioni, NGPC
            Steve Kucharski, OFA HQ                          Denis McCaghey, Little Rock CLSC
            Katy Ballenger, OCA HQ                           Nique Carrington, Little Rock CLSC
            Stan Nakano, District Office, Utah               Jerry Johnson, Little Rock CLSC
            David Dickson, District Office, Pennsylvania     Wayne Reid, Little Rock CLSC
            Linda Nelson, District Office, Arkansas          Joel Stiner, Fresno CLSC
            Hien Nguyen, Sacramento LPC                      Leslie Niswander, Fresno CLSC
            Lora Loethen, OLO                                Gary Wamhof, Fresno CLSC
            Nina Levine, OGC                                 Theresa Pike, Fresno CLSC
            Eric Benderson, OGC                              Rick Adams, Fresno CLSC
            Raymond Baca, OCFO, Colorado                     Bryan Hooper, OLO
            Terry Hetherington, Santa Ana NDLLC



                                                FACILITATION TEAM
Rick Tucci, Leap Technologies        Greg Kurgansky, ICOR Partners          Mike Chervenic, ICOR Partners
Bob Daly, Leap Technologies          Irina Carnevale, ICOR Partners         Kamal Kaur, ICOR Partners



                                                                                                            7
Leadership Jumpstart Event Methodology


             1                            –   What is the process and the
                 DEFINE the                   requirements for meeting customer
                 Process & Requirements       expectations?


             2                            –   What’s adding value in the process
                 MEASURE ―AS IS‖              today? Where’s the waste? What’s the
                                              opportunity for performance gain?
                 Performance


             3                            –   What is the shift in process design
                 ANALYZE What                 required to achieve breakthrough
                                              performance?
                 Needs to Change


                 INNOVATE                 –   How can we apply Lean, Six Sigma and
             4                                innovative thinking to make a quantum
                 Breakthrough Designs         improvement in performance?
                 & Solutions


             5   CONTROL For Rapid,       –   How do we accelerate implementation
                                              of improvements while minimizing
                 Risk-Managed                 risk?
                 Implementation


                                                                                      8
Executive Summary


  1. The Jumpstart Event Team validated the Pre-Event Baseline Assessment
     conclusion that the servicing, liquidation and purchase process for SBA
     7(a), SBAExpress, and 504 loans is overly complex and ripe with
     opportunities to improve productivity and customer service.
  2. The Jumpstart Team identified many complicating factors that currently
     block a breakthrough in loan service performance including: The broad
     network of stakeholders with different interests and priorities; a large
     distribution system of lenders of varying experience and loan servicing
     discipline; disconnected information systems; burdensome SOPs; and,
     performance metrics and goals that tend to reward activity over analysis
     and continuous improvement.
  3. To unravel the current complexity, the Jumpstart team focused on analyzing
     the end-to-end performance of four core value streams that drive loan
     servicing performance: 7(a) Loans; SBAExpress Loans; 504 Loans and
     Asset Recovery of these loans.




                                                                                  9
Executive Summary (Cont’d)

  4. Comparison of “As Is” performance on these core value streams to potential
     performance (when delays and rework are eliminated) indicates that a 25%
     improvement in processing efficiency (measured by factors such as processing
     turn time, total “touch time” and cost per loan and backlog levels) is well within
     reach through effective, coordinated process improvement action.
  5. The Jumpstart Team crafted a set of Breakthrough Redesign Maps to provide a
     target for aiming and executing actions to improve performance in each core
     loan processing value stream.
  6. Improvement Opportunity Portfolios were generated for each core value stream
     and sorted for immediate, mid-term and longer-term action.
  7. A total of 43 actions were targeted for execution over the next 90 days using a
     combination of Rapid Action Teams and Individual Project Champions.
  8. The resulting Rapid Improvement Campaign I Action Plan developed from the
     Jumpstart Team’s work will allow OCA to move ahead aggressively, but with
     tight controls, to breakdown the barriers to improved performance and build
     greater teamwork and cooperation both within OCA and across stakeholder
     communities.

                                                                                          10
Leadership Jumpstart Event


 Incoming Participant Perspectives on Change
Incoming Perspectives of Jumpstart Participants

What are your highest hopes for what this Rapid Improvement Campaign can accomplish?


   We will get the resources needed to support        We will move from operating as individual
    changes.                                            silos to working together across the entire
                                                        SBA.
   We will clarify how to define campaign
    success – what does a 25% improvement in           We will integrate our IT systems and make
    processing efficiency mean?                         them more user-friendly to help us get out
                                                        from under the paper.
   We will identify current processes that we
    can eliminate through automation,                  We will look at the complete life-cycle of the
    delegation to partners or by just not doing         loan and see it from the lender and borrower
    them.                                               perspective.
   We will initiate risk-adjusted processing and      We will get all of our people to understand
    oversight.                                          the ―Big‖ SBA mission.
   We will achieve consistency in all processes
    and policies across Centers without limiting
    creativity and flexibility.




                                                                                                         12
Incoming Perspectives of Jumpstart Participants

What do you see as the biggest challenges to achieving the goals of this Rapid Improvement
Campaign?

     Can we get to consensus on what are           Can we shift the orientation of
      acceptable levels of risk in loan              operating in silos to collaborating
      processing?                                    across lines?
     Can we find the fine line between             Can we ignite our people back at our
      ―fast-forward‖ and being diligent in           offices to make the change?
      managing lender compliance.
                                                    Can we get the OIG to support us?
     Can we educate lenders on our
      process who only purchase two
      loans a year?
     Can we really challenge existing
      SOPs and speed revisions?




                                                                                             13
Incoming Perspectives of Jumpstart Participants

What are the paradigms (existing beliefs, assumptions and “sacred cows”) that must be
“busted” to achieve the goals of this Rapid Improvement Campaign?


   SBA can’t trust lenders to follow good lending            SBA is bound by Office of Personnel Management
    practices and our processes, so we need lots of            classifications.
    oversight, signatures and paper to manage risk.
                                                              Modernization of SBA’s IT systems will solve all loan
   SBA can’t trust its employees to follow procedures         processing problems.
    so we need multiple reviews, signatures and paper
    to ensure compliance.                                     Experienced employees are easily replaced in a loan
                                                               processing operation like ours.
   You can’t trust other SBA departments to support
    you or make decisions so don’t engage them in             Loan servicing is very different from liquidation
    designing solutions to problems.                           which is different from purchase – ―it’s all unique.”

   SBA’s mission is to not lose a dime on any loan –         OIG, OMB and Congress will never support a major
    risk is bad!                                               change in the status quo.

   It takes too long and is too hard to change SOPs, so      If you’re uncomfortable with change just wait it out.
    why bother?
   We can’t hold lenders accountable or they will stop
    doing business with SBA.




                                                                                                                       14
Leadership Jumpstart Event



Define Step Work Products
End-to-End Performance System Map for
7(a), SBAExpress, and 504 Loans

    No defined process for quickly removing barriers –        Quantity of servicing actions emphasis vs. quality and
    black hole syndrome.                                      value of actions.

       Strategy, Structure & Cultural Influences                                 Process Metrics
• Tone at the top that either supports or stops change        •   Number of loan servicing actions completed
• Funding cycle and political influences                      •   Servicing cost per loan
• Pressure on Districts to drive loan volume without          •   Ratings on lender loss performance
  regard for processing capacity                              •   Lender, customer satisfaction surveys
• Inconsistent policies toward risk tolerance
• Lack of trust


     Large number of lenders—difficult to manage quality.     Many stakeholders with different interests and priorities.


    Suppliers/Partners                    Inputs                        Outputs                    Customers/Partners
• Borrowers                     •   Loan Applications         • Loan Decision                  • Borrower
• Lenders                       •   Lender Support Requests   • Completed Loan                 • Lenders
• Field Offices                 •   Change Requests           • Final Loan Disbursement        • District Offices
• SBA Employees                 •   1502 (Loan Data) Input    • Servicing Actions              • SBA Employees
• SBA                           •   Regulations               • Loan Files (Paper &            • SBA Contractors,
  Contractors/Vendors           •   SOPs                        Electronic)                      Vendors
• Oversight Groups                                            • Payments to Lenders            • Oversight Groups
  (OGC, OIG, etc.)                                            • Performance Data (Error          (OGC, OIG, etc.)
                                                                reports, portfolio reports,
                                                                etc.)


                                                                                                                        16
End-to-End Performance System Map for
7(a), SBAExpress and 504 Loans (cont’d)

 End-to-end life cycle of               Many, many SBA touches                 High percentage of loan            Each Center operates
 individual loans difficult             of loan file                           actions related to error           independently
 to track                                                                      correction

                                                      Macro Process Flow
                                                                                                                               
  District Office,         Loan Application       Loan File Sent to        Loan Serviced,         Loan Liquidated and         Loan File sent to
  Lender, Web                Received in          Servicing Centers          Cancelled or               Purchased             Records Center
Marketing of SBA          Processing Center         (Little Rock &              Retired           (Little Rock, Fresno        (Dallas, TX, San
 Loan Programs              (Sacramento)               Fresno)              (Little Rock &              & Herndon)              Bruno, CA)
                                                                               Fresno)


     Many non-integrated,                              Serial, non-collaborative                       Minimal focus on
     work around systems                               process for revising SOPs                       influencing lender practices


                                        Supporting Activities, Processes & Systems

    Agency            Local/Home-              Standard          Regulations            SOP               Compliance                Lender
  IT Systems           Grown IT                Operating             &                 Revision           Audits - IPIA            Practices
                      Applications            Procedures          Statutes             Process



               SBA OCIO                                          SBA OGC                                                  NAGGL/
                                                                  & OIG                                                   NADCO




                                                                                                                                                  17
Loan Processing Value Streams

                     PURPOSE                      VALUE-ADD                           CRITICAL
                                                                              PROCESSING REQUIREMENTS

                Capital core access for          Flexible array of loan       Effective education of borrowers and lender
   7(a) Loans   under-serviced small             options                       partners.
                businesses
                                                                              Pre-approval risk assessment rating and
                                                                               oversight level slotting.



                                                                              Highly efficient self-service loan approval
   SBAExpress   Rapid, supplemental capital      Accelerated                   process.
                access for under serviced        processing for fast
   Loans        small businesses                 injection of funds           Tested risk criteria and standards.
                                                                              Mistake-proof systems to minimize errors.



                                                                              Strong partnership with program lenders (CDCs).
                Fixed asset funding to promote   Lower rate for large
   504 Loans    economic development in          loan values                  High-level of lender delegation based on
                disadvantaged communities                                      processing skill and experience.
                through small business




                Maximize recovery of dollars     Recovers funds for           Skilled and experienced specialists in liquidation
                on defaulted 504, 7(a) and       reapplication into the        and purchasing.
    Asset
    Recovery    SBAExpress Loans                 market                       Defined transparent process to all stakeholders.
                                                                              Single point of ownership for case management.




                                                                                                                                    18
Loan Processing
Leadership Jumpstart Event


7(a) Loan Process “As Is” to Breakthrough Analysis
7(a) Loan Process Value-Stream Map (Page 1)
(Preferred Lender and Non-Delegated Lender)

                                                             Value-Added Activity Flow
                          P1                                             P2                                                                           P3
  PLP              Collect Minimal                                 Lender Modifies                                                               SBA Collects
  Loan              Information in                                                                                                                Loan File at
                                                                    Loan File as                                                                 Disbursement
                    Application to           All Lenders              Changes                                                                   and sends File
                   Reserve Funds              Sign-Off                 Occur                                                                    Electronically to
                                           Upfront on SBA                                                                                       Service Center
                                            Conditions for
                          ND 1                Purchase                  ND 2a                     ND 2b                    ND 2c                      ND 3
  Non-              Mistake Proof                                • Queue
                                                                                              Make eligibility/         Notify Lender/            Ship Complete,
Delegated            Application to                                applications by
                                                                   size/credit score         credit decision in          Borrower of           Error Free Package
  Loan            Prevent Incomplete                                                           single review            Decision and            to Servicing Center
                   Erroneous Entry                               • Direct Large/High
                                                                   -risk for full                                        Conditions               (until electronic
                      into System                                                                                                              transfer is available)
                                                                   understanding

                                                        End-to-End Process Flow Today
                                                                                                                              – Enter Info.
                           –   Screen                         2a           – Check eligibility                                  Into system               3
              1                                                                                             2b
                           –   Create paper file                           – Legal review of                                  – Reconsid-
                                                            Loan
                           –   Enter into system                             eligibility                 Final Loan             eration             Ship File to
      Receive Loan                                       Underwriting
                           –                                               – Underwrite loan           Prep & Review                                 Servicing
       Application             Assign to loan office   (Non-delegated)                                                        – Legal Review
                               (if non-delegated)                          – Final action                                                             Center
                                                                                                                              – Re-loop
                                                                             decision

         Is manual screen required?                                                                 Multiple handling
                                                        Is legal review eligibility                                                       Cost of shipping and
                                                        needed if criteria is clear?                                                      storing files
         Why create a paper file upfront?
                                                                                                    Back for forth fax time
                                                                                                    and effort
         Incoming errors entered into system


         Idle employee time waiting for applications
                                                                     Areas of Waste
                                                                                                                                                                    20
7(a) Loan Process Value-Stream Map (Page 2)
(Preferred Lender and Non-Delegated Lender)

                                                       Value-Added Activity Flow
                    P4
  PLP          Delegate all                                      No change to                                         No change to
  Loan         Servicing to                                    “As Is” unless all                                   “As Is” unless all
                 Lender                                         electronic files                                     electronic files
                                     Value Assist
                                      Lenders/
                                      Borrowers
                   ND 4            to Mitigate Risk
  Non-         Delegate all
Delegated      Servicing to                                      No change to                                         No change to
  Loan           Lender                                        “As Is” unless all                                   “As Is” unless all
                                                                electronic files                                     electronic files

                                                End-to-End Process Flow Today
                 4            – Incoming request   –   Final Action                5            – Locate file                6           – Locate file
                              – Assign to loan     –   Notify lender       Receive Notification – Update system         Loan paid        – Dispose file
            Service the
                                officer            –   Reconsideration        of Adverse        – Ship file to            in Full          to NARA
               Loan
                              – Recommendation     –   Re-loop             Condition/ Potential   purchase/
                                by loan officer                                  Default          recovery center
                              – Legal review


                     1502 Error correction time and expense                                                           Time locating loan files


                     Excess oversight on low risk lenders                                                             Shipping costs


                     Oversight driven by lack of lender education
                     and mistake-proofing


                                                              Areas of Waste

                                                                                                                                                          21
7(a) Loan Process – Preferred Lender
“As Is” vs. Value-Streamed Efficiency Comparison

                                        Est.             Est.                                      Est.           Est.
 ―As Is‖ Process                   ―Touch Time‖1      First-Pass      Value-Stream            ―Touch Time‖ 1   First-Pass
                                     Cycle Time        Quality2          Process                Cycle Time      Quality2
 Receive                          10 mins per            98%       Receive                   5 mins per         100%
  Application                      application                       Minimal Info              application
                                                                     Needed
 Under-                        20 mins per                         Lender Modify                   0            100%
  Writing                    application (Up to           98%        file as changes          (No turnaround
                             3-day turnaround)                       occur                       required)
 Ship File to                  10 mins per                         Transfer upon                   0
                                                                                                                  100%
                             application (Up to           98%        collection of complete     (Electronic
  Servicing
  Center.                    3-day turnaround)                        file from lender           Transfer)
 Loan                           Up to 4 hrs                        All servicing action        1 hr per         95%
                                                          80%
  Servicing                          for                             delegated to lender      Action Review
                               Action Reviews                        upon qualification
 File Disposition                   30 mins                        File Disposition                0
                                                          98%                                   (Electronic       100%
  (Purchase or                                                       (Purchase or Paid-
  Paid-In-Full)                                                      In-Full)                    Transfer)

                                   5 hrs 10 min                                                 1 hr 5 min        95%
      TOTALS                       “Touch Time”          73.8%           TOTALS                “Touch Time”


 * Based on one action per file.
(1) ―Touch Time‖ = Actual Employee Time
(2) First-Pass Quality = Percentage that action is done without
    rework




                                                                                                                            22
7(a) Loan Process – Non-Delegated Lender
“As Is” vs. Value-Streamed Efficiency Comparison

                                       Est.              Est.                                         Est.            Est.
 ―As Is‖ Process                   ―Touch Time‖       First-Pass        Value-Stream              ―Touch Time‖     First-Pass
                                    Cycle Time        Quality (2)          Process                 Cycle Time      Quality (2)
 Receive                          30 mins per            75%        Receive                      5 mins per         100%
  Application                      application                        Minimal Info                 application
                                                                      Needed
 Under-                          9 hrs per                          Single-Pass under-            90 mins            95%
  Writing                     application (Up to          65%         writing upon full pkg.        per File
                             10-day turnaround)                       file receipt from lender
 Ship File to                  10 mins per                          Transfer upon                     0
                                                                                                                      100%
                             application (Up to           98%         collection of complete       (Electronic
  Servicing Ctr.
                             3-day turnaround)                         file from lender             Transfer)
 Loan                           Up to 4 hrs                         All servicing action            1 hr per         95%
                                                          70%
  Servicing                   30 min per Action                       delegated to lender        Action Reviewed
                                 Reviewed                             upon qualification
 File Disposition                   30 mins                         File Disposition                  0
                                                          98%                                      (Electronic        100%
  (Purchase or                                                        (Purchase or Paid-
  Paid-In-Full)                                                       In-Full)                      Transfer)

                               14 hrs 40 min                                                      2 hrs 35 min         90%
      TOTALS                    “Touch Time”             32.8%             TOTALS                 “Touch Time”


 * Based on one action per file.
(1) ―Touch Time‖ = Actual Employee Time
(2) First-Pass Quality = Percentage that action is done without
    rework




                                                                                                                                 23
7(a) Loan Process
Breakthrough Opportunity Size-Up

   Major Source of Waste/                     Estimated Cost of         Estimated Cost of               Potential
 Opportunity for Improvement                       “As Is”               Value-Streamed                 Savings
      in “As Is” Process                          Operation                 Operation
 (1) Move from paper loan application           12 hrs “Touch Time”      2.5 hrs “Touch Time”     9.5 hrs per loan X 6,900
     submission to all electronic                     per loan                 per loan           Non-Delegated Loans
     submission by non-delegated              (Non-Delegated Loans)     (Non-Delegated Loans)     per year
     lenders – including ability to make                                                          = 65,550 hrs per year
     on-line corrections through life-cycle                                                        33 full time
     of the loan                                                                                  equivalents
 (2) Move to full delegated authority for       Ave of 90 mins per        Ave of 60 mins per      30 min per loan X
     servicing all preferred lender loans        action reviewed           action reviewed        39,100 Loans per year
                                                                                                  = 19,550 hrs per year
                                                                                                   10 full time
                                                                                                  equivalents

 (3) Move to 1502 error correction to          7,800 hrs per year in     826 hrs per year in      6,974 hrs per year
     lender (via Colson) with SBA review      error correction action   error correction action    3.5 full-time
     at liquidation or “60-day late cases”      (Approx 4 full-time      (Approx .5 full-time     equivalents
     only                                          equivalents)              equivalents)



 *   Based on 1,950 hrs per year = one FTE




                                                                                                                             24
7(a) Loan Process Breakthrough Vision for Change

              From This Today …                                To This Tomorrow …

 Paper-intensive process.                      Paperless, fully electronic environment for both
                                               preferred and non-delegated loans.

 Complex, burdensome Standard                  A streamlined set of SOPs designed to ensure
 Operating Procedures that are                 compliance to a simple-to-understand and use
 difficult to monitor, understand and          guidebook for both SBA employees, lenders and
 actually increase the probability of error.   borrowers that reduces the probability of error.



 SBA-intensive loan servicing that             Fully-delegated lender servicing on all loans with
 duplicates lender oversight while loan is     effective guidance by SBA upfront and efficient,
 active; creates backlogs and takes away       single-pass review at time of disposition leading to
 time for lender education and value-          zero backlogs.
 added assistance.


 Inconsistent loan origination review          Consistent interpretation and application of 7(a)
 processes both within and across state        loan regulations across the nation with a
 lines.                                        transparent process that lenders could understand.

 Difficult and inconsistent access to SBA      A user-friendly self-help Web site for lenders and
 information and loan servicing personnel.     borrowers and a Call Center for 7(a) loans to direct
                                               callers to “Level II” support.


                                                                                                      25
7(a) Loan Process (All Loans) Breakthrough Redesign Map

                  Revised SOPs              Expanded oversight                                                                    Lender delegation of
                     to support              focused on finding          New policy to                1502 errors                  authority redefined
                    single pass                trends in lender          support use of               corrected by                     based on
                                             processing errors,           e-signatures                FTA/Colson                    experience, risk,
Governance        review by SBA
                                            mistake-proofing and           (vs. “wet”)                                              profile, servicing
                                                  education                                                                               quality


               Web-enabled guidance                                  Lender education provided
                and access to “live”                                   as needed to prevent
                support as needed                                       downstream errors

                                                                                                                                     
                     Loan           Single pass/                           Lender         Lender funds                                 Disposition
Lean Process      application       single touch        Decision        notified/ sign-       loan                SBA
                                                                                                                                  – Paid in full (send
    Flow           created          SBA review         approval or          off on         guarantee          inventories
                                                                                                                                    to NARA)
                    on-line         (eligibility &       decline        servicing and         fees              loan to
                                                                                                               servicing          – Recovery (send
                                       credit)                            purchase        electronically                            to Recovery
                                                                         standards                               status
                                                                                                                                    Center)

                                                                                                            Lenders use CPR
                                                                                                           for changes, mods
                                                                                                           reporting fees, etc.
Enabling
 Tools                                                                                                                       Web enabled
                Ongoing lender             7(a) loan self-             Standard credit           Web enabled
                   education               help Web site                 scoring tool            notification to              reporting,
               programs (District        (lender/borrower                                            lender                 charges, mods,
                  supported)               guidance and                                                                          etc.
                                         application form)


                          Call Center to                         One loan                            Web-based
                         request “ear-to-                    tracking system                         electronic
                           ear” support                        – linked and                          signatures
                                                               sync to Web


                                                                                                                                                         26
Loan Processing
Leadership Jumpstart Event


SBAExpress Loan Process “As Is” to Breakthrough Analysis
   SBAExpress Processing Value-Stream Map

                                                              Value-Added Activity Flow
                                                                                                                                        7                     8
                             2                          3                    4                   5                 6
      1                                          Lender Initiated                                                                    Lender              SBA Review
                    Auto Electronic Loan                             Monitoring Loan         FTA owns           Lender
                                                   Electronic                                                                      Electronic            Approve Part
  Accurate             # Assignment                                       Status            Reconciliation     Electronic
                                                    Servicing                                                                     Submission of          of Guaranty
  Electronic              Receipt                                    Electronic Only –        Process         Collection of
                                                     Actions                                                                        Guaranty             Claim & C/O
 Lender Input          Lender signs                                   Lender or FTA                          Recovery Data
                    Guaranty/Conditions         (SBA / Non-SBA                                                                      Purchase
    100%                                                                                                                            Package
                     Document Upfront             concurrence)


                                                     End-to-End Process Flow Today
                                 2                       3                        4                    5      -   Loan Increases                           6
        1
                                                                                                              -   Loan Modifications
   Application             Input/Review              Process                 Ship Files.                                                               Put Loans
                                                                                                   Service    -   Loan Cancellations
                           Data. Create            Application –           Receive Files                                                                    in
    Submitted                                                                                                 -   Collect 1502 Lender Reports
                           File (Paper or        Electronic (Issue                                  Files                                              Liquidation
Via Fax or E-Tran                                                          (Docket Files)                     -   Guaranty Fee Collection
                            Electronic)           Loan Number)                                                                                           Status
                                                                                                              -   Original Guaranty Fee Letter
      2                                     4                                         5                            5
             Re-Keying of Data                          Reinstatement. Multiple                FTA PMG/System                Reduce Electronic Files
                                                        Day N-Screen Process                   Shuts Down 20th-30th          to Paper
                                                        (2-3 Days)                             of each Month (1502
            Two Processing Tracks                                                              System)
            (Paper and Electronic)                     Modifications Not                                                    Looking in Two Places
                                                       Electronic                              FTA Does Not                 for Full Information
             Incorrect Data Entry                                                              Resolve All Reporting
                                                                                               Issues
                                                       Reduce Electronic Files                                               Manually Input Loan
                                                       to Paper                               Guaranty Fee                   Collateral Information to
                       3                                                                                                     Mainframe
                                Spending money                                                Estimation/Calculation
                                & time on shipping                                            Complex and
                                                                                                                                      6      Manually Input Changes
                                                                                              Inconsistent
                                                                                                                                             to “In Liquidation” Status
                                                                                                                                             in Mainframe by Multiple
                                                                     Areas of Waste                                                          Offices


                                                                                                                                                                        28
SBAExpress Loan Processing Value-Stream Map (Cont.)

                                                     Value-Added Activity Flow




                                                 End-to-End Process Flow Today

        7        - Process Lender Release /                      8                                 9                              10
                   Cancellation of Guaranty
     Perform                                                Charge Off                           Expedite                   Paid in Full/File
                 - Submit Denial of Guaranty to HQ                                                                          Closed. Ship to
     Purchase                                                 Loans                            Purchase.
                 - Review and Approve Liquidation                                                                           Federal Records
                                                                                             Not Charged Off
                  (Offers in Compromise)                                                                                        Center.
                                                                                              Immediately



 7                                           8                                                   9
                                                     Manually Input Guarantor Information/              2nd Review of Loans at
       Purchase Package                              Multiple Input Screens (Over 4)                    Charge-Off
       Not Electronic
                                                                                                        Expedited Purchase
       Review Compromise                                                                                Process Wastes of Time
       Action and Decision
                                                                                                        Create Paper File

                                                                                                                      10
                                                                                                                                 Pull and Ship Paid
                                                                                                                                 in Full Files

                                                            Areas of Waste

                                                                                                                                                      29
  SBAExpress Loan Process –
  “As Is” vs. Value-Streamed Efficiency Comparison

                                                     Est. First-                                                              Est. First-
                              Est. ―Touch Time‖                                                       Est. ―Touch Time‖
     ―As-Is‖ Process                                   Pass         Value Stream Process                                        Pass
                                Paper / E-Tran                                                              E-Tran
                                                      Quality1                                                                 Quality1
 Receive Application                 N/A               98%         Receive Application                      N/A                98%
 Review Data / Create File           N/A               98%         Electronic Loan #                        N/A                98%
                                                                     Assigned
 Process Application              5 hrs / N/A          98%         Electronic Servicing                     N/A                98%
 Ship & Receive Files           2 hrs / 0.5 hrs        98%         Monitoring Loan Status                   N/A                98%
 Loan Servicing                 12.5 hrs / N/A      80%x15%        FTA Reconciliation                       N/A                98%
 Lender Reporting (1502)                              55%
 Place Loan in Liquidation         .5 hrs /            98%         Electronic Recovery Data               0.25 hrs             98%
  Status                                                             Collection by Lender
 Mode of Disposition                16 hrs            30%          Electronic Submission of               0.25 hrs             80%
 Elapsed Time for Express                             100%          Purchase Package
  Purchases
                                                                    Review, Approval,                       6 hrs               75%
 Charge-Off Disposition             3 hrs              5%           Charge-Off

 File Closed and Archived            N/A               90%         OLO Portfolio Monitoring                 1 hr               99%
                                                                    CLSC Quality Assurance                                      98%
         TOTALS               13 hrs 30 min – Paid    47.5% -                TOTALS                   15 min – Paid in Full   87.7% - PIF
                                     in Full            Exp                                              7 hrs 30 min –         52.6% -
                                33 hrs 30 min -        0.7% -                                               Purchase           Purchase
                                   Purchase           Non-Exp
                                                                    * Based on one action per file.
                                                                   (1) ―Touch Time‖ = Actual Employee Time
                                                                   (2) First-Pass Quality = Percentage that action is done without
                                                                       rework

                                                                                                                                            30
SBAExpress Loan Process
Breakthrough Opportunity Size-Up

   Major Source of Waste/                  Estimated Cost of   Estimated Cost of         Potential
 Opportunity for Improvement                    “As Is”         Value-Streamed           Savings
      in “As Is” Process                       Operation           Operation
 (1)   Servicing Actions                          1-15 hrs          0.06 hrs       1.4 hrs x 11,000 loans
       1502 Process                                10 hrs             0 hrs        = 15,400 hrs per year
                                                                                   9.96 hrs x 6,750 per
                                                                                   process = 4,050 hrs per
                                                                                   year
                                                                                    10 full time equivalents
 (2) Paper Guaranty Purchase                       4 hrs             2 hrs         2 hrs X 11,000 Loans per
                                                                                   year
                                                                                    = 22,000 hrs per year

                                                                                    11 full time
                                                                                   equivalents (backlog)

 (3) Non-Electronic Application Shipping          2.5 hrs           .05 hrs        2.45 hrs x 8,275 =
                                                                                   20,274

                                                                                    11 full-time
                                                                                   equivalents

 *     Based on 1,950 Hrs per year = to one FTE




                                                                                                                31
SBAExpress Loan Process Breakthrough Vision for Change

               From This Today …                          To This Tomorrow …

 Paper files                               Electronic files
 Cumbersome SOP                            User-Friendly Guidelines
 SBA System Input                          Lender Input
 Partially Functional GPTS                 Functioning Electronic System of Record
 People-Driven Analysis and Oversight      Proactive System-Driven Lender Oversight
 SBA-Managed 1502 Reporting &              FTA-Managed 1502 Reporting &
 Reconciliation                            Reconciliation
 Tracking, Shipping, Archiving & Storing   Electronic File Management
 Paper Files.
 Brick and Mortar Workspace                Virtual Workspace

 Rule of Two/Three                         Rule of Two. Lender Initiated

 50% Unilateral Actions                    100% Unilateral Actions Delegated Authority
                                           (Except Purchase)
 ―Expedited‖ Purchase
                                           No ―Expedited‖ Purchase




                                                                                         32
SBAExpress Loan Process Breakthrough Redesign Map

                Development                                           Digital                    Shift in                   - Lender Self Service
                 of E-Tran &                                        Signatures                Reconciliation                - Rotating Cross-
                    GPTS                                             Authority                Responsibility                  Functional Staff
                                       Changes in SOP
                                                                                                                            - Electronic Stoplights
Governance      Interface with
                                       Changes in CFR
                                                                                            Lender Changes:                   to Mitigate Risk
                                                                     Increased
                   DFC for                                      Unilateral Authority                                        - Document
                                                                                          Reporting System (ITA)              Management System
                  Payments                                          for Lenders           Contract Mod. For FTA



                                                           Monitoring & Oversight
                                                                    QAR
                                                                   (15%)


Lean Process                                                                                                                    
                Electronic                                                                        Electronic                 Payment Closeout
    Flow                              Disbursement                  Electronic                    Package
                   loan                                                                                                        and Referral to
                                        Increase /                  Purchase                      Review &
                application                                                                                                       Treasury
                                         Servicing                  Package                      Recommend
                 (Loan #                                                                                                          (10%)
                                          Actions                  Submission                    ation Action
               Assignment)
                                                                                                    (40%)

                   Product Flow
                                                 Customer Service
                   Information Flow
                                                      (25%)                                              Legal Review
                   FTE Required (%)
                                                                                                            (10%)


                           Electronic                                          Single Entry              Data Archival
Enabling                   Systems               Document                        System                     Systems
 Tools                   Development            Management                                             (Multiple Backups)
                       Through Servicing        Functionality
                          and Beyond


                                  Web Enabled



                                                                                                                                                      33
Loan Processing
Leadership Jumpstart Event


504 Loan Process “As Is” to Breakthrough Analysis
    504 Processing Value-Stream Map
    (Fully Delegated and Partially Delegated Lenders)
                                                               Value-Added Activity Flow
                                                                F2                    F3
         1                         F1
                                                         Special Access to        Reviewed by
       Lender               Fully Delegated-                Mainframe             SBA During
   Assigned to 1             Conduct own                     Allowed                                                                    Consequences:
                                                                                   Oversight
    of 2 Groups                 Servicing                                                                                            Non-Renewal of PLP
  Based on Risk                                                                                                                     Territorial Consideration
  Based Analysis                                                                        P3                    P4
                                                               P2
        with                       P1                                             Finance/Legal/          Delegated
                                                          Submit Action
  Commensurate           Partially Delegated-                                    Approval Review          Authority to
                                                           Request on
     Authority            Standard Service                                          “Rule of 2”         Execute Service
                                                         “Standard” Form
                                                                                                          Documents

                                                    Servicing Process Flow Today
       1                        2                    3                       4             5                   6             7                    8
                                                                     Loan Officer         CDC                               SBA
    Receive           Loan Officer                                                                           SBA                             Completed/
                                                Legal Review                            Sends all                         Signature
 Servicing Action     Review and                                      Transmits                           Reviews all                        Compliant
                                                                     Approval to         Docs to                           & Send
Approval Request    Recommendation                                                                          Docs                              Servicing
                                                                                        CLSC for                           Back to
   from CDC                                                             CDC                                                                   Account
                                                                                        Execution                           CDC


       CDCs Not Using Standard                  Program Issues Being                            Not Giving CDC                   Shipping Docs Back to
       Forms                                    Reviewed by Legal                               Delegated Authority to           CDC
                                                                                                Execute
       CDCs Making
       Unnecessary                              Evaluation Request and
       Servicing/Requests                       Not Actual Action

       CDCs Not Sending
       Forms in via Preferred
       Method (Email)


                                                                       Areas of Waste

                                                                                                                                                                35
 Asset Recovery Process – Preferred Lender
 “As Is” vs. Value-Streamed Efficiency Comparison


                                                          Est.                                     Est.                 Est.
  ―As Is‖ Process                     Est.                              Value-Stream         ―Touch Time‖1
                                  ―Touch Time‖1        First-Pass                                                    First-Pass
                                                       Quality (2)         Process          Full/Partial Deleg.      Quality (2)
 Receive Servicing                    4                    99%       Receive Servicing                                100%
                                                                       Action & Assign to           0/1
  Action & Review by
  Loan Specialist                                                      LO
                                       2                              Legal Center for              0/1                 98%
 Legal Review                                            98.9%        Review


                                       .5                   99%       Approval to CDC                                   98%
 Approval to CDC                                                                                    0/1


 CDC Sends all                                          99.995%
                                       .5
  Docs Back to SBA

 SBA Signature &
  Send Back to                         3                   100%
  CDC
                                                                                             0 hrs – Full Deleg.
       TOTALS                       10 hrs                  96%            TOTALS                                        96%
                                                                                            3 hrs – Partial Deleg.


* Based on one action per file.
(1) ―Touch Time‖ = Actual Employee Time
(2) First-Pass Quality = Percentage that action is done without
    rework




                                                                                                                                   36
504 Loan Process
Breakthrough Opportunity Size-Up


       Major Source of Waste/                   Estimated Cost of   Estimated Cost of         Potential
     Opportunity for Improvement                     “As Is”         Value-Streamed           Savings
          in “As Is” Process                        Operation           Operation
     (1)    Redundant File Room Pulls                 4,000 pulls       2,000 pulls     0.08 hrs x 2,000 loans
                                                                                        = 160 hrs per year
                                                                                        0.25 hrs x 2,000 loans=
                                                                                        500 hrs per year
                                                                                         1 full time equivalents


     (2) Unnecessary CDC Actions and                    10 hrs             0 hrs        10 hrs X 1,600 Loans per
         Delegated Authority                                                            year
                                                                                         = 16,000 hrs per year

                                                                                         8 full time
                                                                                        equivalents

 *         Based on 1,950 Hrs per year = to one FTE




                                                                                                                    37
504 Loan Process Breakthrough Vision for Change

            From This Today …                         To This Tomorrow …

 Treat CDCs as if ―One Size Fits All‖   Risk-Based Approach
 Paper Loan Files                       Electronic Data and Loan Files
 Paper Requests Permitted               Electronic Requests Required
 CDCs Allowed to use their own Forms    Require Use of SBA Forms with Electronic
                                        Signatures
 Limited Training
                                        Sufficient Proactive Training of CDCs (and others)
 No Action Tracking Web site
                                        Action Tracking Web site for Lenders
 Complex Product
                                        Simple Products
 SBA Signs all Principal Financial
 Documents                              CDC Signs all Principal Financial Documents
                                        under Delegated Authority




                                                                                             38
504 Loan Process Breakthrough Redesign Map


                                                     Updated/New SOP                           Enhanced
                                                    Policy Consistent with                    Oversight for
                                                      the Process Flow                         Servicing
Governance                                                  Below                               Actions




                                                                                                    F3
                                                   F1                       F2                CDC Completes
                                  Fully                                CDC Inputs              all Servicing
                                Delegated       CDCs Rated             Information             Actions and
                     1                             1&2                Electronically             Updates
               SBA Assigns
Lean Process                                                                                   Electronically
               Risk Rating to
    Flow       Each CDC
                                                                    P2                                       F2                  F2
                                 Partially      P1                                     F2
                                                               CDC Inputs                               SBA Analyzes &   CDC Takes Action
                                Delegated    CDCs Rated                            CDC Submits
                                                               Information                                Transmits       Consistent with
                                               3,4&5          Electronically        Servicing
                                                                                                          Electronic        Approval &
                                                                                    Requests
                                                                                                           Approval           Updates
                                                                                                                         Electronic System

Enabling
 Tools
                                                    Create Risk
                                                    Assignment                    Create
                           Change the            Tools or Formula                Electronic
                         Change Process            for Database                   System




                                                                                                                                             39
Loan Processing
Leadership Jumpstart Event


Asset Recovery Process “As Is” to Breakthrough Analysis
    Asset Recovery
    Value-Stream Map (Page 1)

                                                                Value-Added Activity Flow

         1                                    3                       4                   5                6                7                           8
                         2
  Receive                                                      Risk Based            Standardize
                       1 Day              Legal Fee                                                     Risk              Train                    Risk Based
   Lender                                                       Rule of 2            Transcript.
                     Mainframe            Threshold                                                    Based            Lenders                    Charge Off
 Advice/PDK                                                    (Liquidation           Complete
                    (Input/Load)          ($15,000)                                                   Purchase           Merit in                    Review
 on Website                                                        Only)              Package.
                                                                                                       Review           Proposal
                                                                                     Give Priority


                                                        End-to-End Process Flow Today
     1              2                 3                    4                   5               6           7                8                 9              10
                                                    3
  Lender                        Notify Lender             Review                                      Purchase         Deficiency       Liquidation
               Data Entry/                                                Liquidation      Purchase                                                         Close
Advice on                        with SBA               Litigation/                                    Review/         Settlement        Review/
              In Processing                                               Oversight-       Request                                                           File
                                  Express               Liquidation                                   Decision          Explored        Charge Off
Liquidation                                                                 Actions
                                Purchase Kit               Plan


                          2                                       3                                    4                                  5
1
                                                                           Redundant SOPs                      Rule of 3(Litigation
    Duplicate                 Duplicate Data Entry                                                                                                Review of Too
                                                                                                               Only)
    Lender                                                                                                                                        Many Actions
    Notifications             Dual Approval (into                         Manual Status
                                                                          Responses                            Herndon Over $5,000 in             Risk-Based Rule
                              liquidation)                                                                     Legal Fees Sent to DO              of 3
                                                                          Redundant Information to             for Review
                              Mainframe
                                                                          Lender                               Incomplete Plan
                              Activities Take too
                              Long                                                                             Package


    Notice of                 504 Debenture                               Prepare 504 Liquidation
                              Purchase                                                                         Liquidate Loan
    Delinquent                                                            Plan
    Debenture
                                                                            Areas of Waste
                                                                                                                                                                    41
Asset Recovery
Value-Stream Map (Page 2)

                                                       Value-Added Activity Flow




                                             End-to-End Process Flow Today




6                          7                               8                             9
                               Same Review for                 Incomplete Package
     Incomplete Purchase                                                                     Lack of Information for
                               High/Low Dollar Cases           (Compromise)
     Packages                                                                                Wrap Up
                               (exc. $10,000)
     Pre-Purchase Stage
     Review                    Inconsistencies of              Proposals Without Merit
                               Purchase Reviews
     Re-reviews Time
                               Automatic System Time-
                               Out


    No Standard
    Transcript of
    Account
                                                               Areas of Waste
                                                                                                                       42
  Asset Recovery Process
  “As Is” vs. Value-Streamed Efficiency Analysis

                                 Est.               Est. First-                                         Est.                Est. First-
    ―As Is‖ Process                                                 Value Stream Process
                             ―Touch Time‖1         Pass Quality2                                    ―Touch Time‖1          Pass Quality2
 Lender Notification             0.5 hrs              100%         Lender Notification                 0.5 hrs                100%
 Data Entry / In                    1 hr              98%          Data Entry / In                     0.5 hrs                 98%
  Processing                                                         Processing
 Lender Ack.                                          98%          Lender Ack./ Instructions             N/A                   N/A
                                *Incl. In Step 2
 /Instructions Express PDK                                           Express PDK
 Review Liquidation/           Liq – 6 hrs            60%          Review Liquidation/           Inhouse Liq – 0 hrs           98%
  Litigation Plan               Lit – 9 hrs                          Litigation Plan                Inhouse Lit – 3 hrs
                             Outhouse – 8 hrs                                                        Outhouse – 8 hrs
 Liquidation Oversight            25 hrs              80%          Liquidation Oversight                12 hrs                 80%
  Actions                                                            Actions
 Purchase Request                  2 hrs            7(a) – 30%     Purchase Request                     3 min                  N/A
                                                   Express – 50%
 Purchase Review /                 8 hrs              90%          Purchase Review /                    10 hrs                 N/A
  Decision                                                           Decision
 Deficiency Settlement             2 hrs              75%          Deficiency Settlement                 N/A                   N/A

 Liquidation Review                8 hrs            7(a) – 50%     Liquidation Review and               9 hrs                  N/A
  and Charge-Off                                   Express – 95%     Charge-Off
 Close File                         1 hr              95%          Close File                            1 hr                  N/A

         TOTALS              Inhouse - 71 hrs        7(a) – 44%                                     Inhouse - 44 hrs             77%
                                                                            TOTALS
                               Outhouse –          Express – 51%                                   Outhouse – 36 hrs
                                 63 hrs
                                                                              (1) ―Touch Time‖ = Actual Employee Time
                                                                              (2) First-Pass Quality = Percentage that action is done without
                                                                                  rework                                                    43
Asset Recovery Process
Breakthrough Opportunity Size-Up

   Major Source of Waste/                  Estimated Cost of   Estimated Cost of         Potential
 Opportunity for Improvement                    “As Is”         Value-Streamed           Savings
      in “As Is” Process                       Operation           Operation
 (1)    In House – Eliminate Multiple             62 hrs            36 hrs         26 hrs x 4,500 loans
        Review-Go to Single Pass Review                                            = 117,000 hrs per year
                                                                                    60 full time equivalents




 (2) Out House                                     >0                 44           36 hrs X 500 Loans per
                                                                                   year
                                                                                    = 18,000 hrs per year

                                                                                    9 full time equivalents


 *     Based on 1,950 Hrs per year = to one FTE




                                                                                                                44
Asset Recovery Process Breakthrough Vision for Change

            From This Today …                      To This Tomorrow …

  Treating all lenders the same when   Risk grade lenders relative to work quality. Empower
  it comes to recovery                 top lenders to process their purchases online
  Multiple data systems. Inaccurate    Integrated user-friendly systems
  Too many review stops                Consolidated oversight review
  Too much paper                       Shift to electronic processing
  Non-standard transcripts (paper)     Standard electronic/on-line Transcript of Account
  Rule of 3 Reviews                    Rule of 2 Reviews - where appropriate

  Partial Web-based                    Full Web-based, imaging and E-Tran technologies

  Lender training by SBA staff         Lender training Website

  Inconsistent guidance and response   Clear and concise guidelines, rewards, and
                                       consequences
  Ineffective 1502 lender reporting
                                       FTA corrects all 1502 errors
  100% reviews
                                       Risk-based recovery review and charge-off reviews
  Full HQ process of repairs
                                       Delegate repair authority to Centers




                                                                                           45
 Asset Recovery Process
 Breakthrough Redesign Map

               Regulation-                                      Regulation/SOP                                        - Recovery does
                Litigation                                       Partial Denials                                        not equal
                 Criteria                                                                   Quality Assurance           liquidation
                                           SOP –                                                                      - Review Once!
Governance                                                                                   Reviews (Post
                                         Risk-Based                                          Purchase / Post          - “If it does not
                 SOP –                                          Center Procedures                                       fit, we do not
                                                                   Rewards &                   Charge-Off
                Rule of 2                                                                                               submit.”
                                                                 Consequences



                                                                            Approved


                                                                                                                         
Lean Process                    Criteria-          Lender
    Flow       Lender                                                  SBA            Payment          Charge-Off          Close File
                                 based            Requests            Review                          (As Required)
               Notifies                                                                Issued
                                Litigation        Guaranty
                SBA
                                 Review           Payment


                                                                            Disapproved

                                                                   Negotiate with
                                                                      Lender



                     Web Interface           Electronic Files        Transfer Entire 1502         Empower Top
Enabling                                                             Resposibility to FTA           Lenders to
 Tools                                                                                               Process
                      Web-based               Electronic                                          Purchases On-
                       Training               Transcripts                                        Line (Risk-based
                                                                                                    Purchases)
                                                                                                 Sampling Based
                       Integrated                                                                on Lender Rating
                      User-Friendly
                         System

                                                                                                                                          46
Loan Processing
Leadership Jumpstart Event


Summary Productivity Gain Projection
Loan Processing
Productivity Gain Projection




                               48
Loan Processing
Leadership Jumpstart Event


Rapid Improvement Campaign I Action Plan
  Rapid Improvement Campaign I
  Overview

               Meet as
             Requested by                           Campaign      – Preston, Galvan, Hager, Tasker,
              Campaign                              Executive       Pappas, Main, Liu, OGC, (OIG
EXECUTIVE       Board                               Sponsors        as required)
SUPPORT
                                                                  – Hager, Tasker, Liu, Miller,
                Meets                               Campaign        Hooper, Hammersley, Blewett,
                Weekly                               Board          McCaghey, Stiner, Taylor,
                                                                    Pucci, Ballenger

RAPID
ACTION
TEAMS
                         7(a)            SBAExpress             504                 Asset
                                                                                   Recovery

                                  Technology                              Policy
                                    Support                              Support

LEADERSHIP
DECISION
PROJECTS             7(a)              SBAExpress          504                  Asset
                                                                               Recovery

                                Technology                               Policy
                                  Support                               Support


                                                                                                      50
 Rapid Improvement Campaign I
 Roles and Responsibilities

Sponsor
A member of the Campaign Board. Provide sponsorship and oversight for the Rapid Action
and Leadership Decision Projects for each portfolio (e.g. 504). Elevate issues to the
Campaign Board for review and resolution.
Time Commitment: 1-2 hrs/week through 3/31/07

Team Leader
Coordinate and manage Rapid Action Team activities and deliverables. Lead weekly team
meetings.
Time Commitment: 4-8 hrs/week through 3/31/07

Champion
Develop brief action proposal(s) for Leadership Decision Projects.
Time Commitment: Varies by project. Short duration.

Team Member
Participate in Rapid Action or Leadership Decision teams to develop project deliverables and
proposals.
Time Commitment: 2-4 hrs/week through 3/31/07




                                                                                               51
Campaign I Rapid Action Project Charters:
7(a) Loan Process Team


             Design and implement immediate improvements to the
             7(a) loan process that will accelerate OCA toward the
             breakthrough vision for change and redesigned process for
 TEAM        servicing 7(a) loans.
MISSION


             1. Number of target improvements implemented.
             2. Reduction in weekly run rate of 7(a) loan servicing
                actions completed by SBA personnel.
SUCCESS
METRICS      3. Reduction in weekly run rate of 7(a) loan lender
                submission errors.
             4. Reduction in number of 7(a) loan compliance errors vs.
                baseline average determined by statistically significant
                sampling.
             5. Positive feedback from 7(a) lenders based on customer
                satisfaction survey scores.


                                                                           52
Campaign I Rapid Action Project Charters:
7(a) Loan Process Team (Cont’d)


 
               a.   Complete design and documentation of the 7(a) Loan Breakthrough Redesign Map
                    including detailed guidance on roles and decision-making.
               b.   Develop and implement standard documents and templates across the end-to-end 7(a)
   TARGET           loan process with built-in guidance on compliance requirements, mistake-proofing and
IMPROVEMENTS        customer service information.
               c.   Develop and implement lender training offerings on 7(a) program and guidance to
                    lenders for ―smooth processing.‖
               d.   Develop and implement a strategy to use existing SBA Call Centers to support lender
                    and borrower inquiries on 7(a) loans (test and then expand to cover SBAExpress and
                    504 loans).
               e.   Revise loan authorization documents to call attention to Consistent/
                    /Prudent/Reasonable (CPR) expectations for all lenders.
               f.   Simplify and rewrite the existing SOPs for 7(a) loans as necessary to support targeted
                    improvements.


   CALENDAR    Launch By: 1/19/2007                    Complete By: 3/30/2007
  MILESTONES


                                                                    Team Members:
               Sponsor: Bryan Hooper
                                                              Linda Nelson  Wayne Reid
               Team Leader: Gary Wamhof                       Gail Hepler   Theresa Pike
 RECOMMENDED                                                  Frank Pucci   Phil Mahoney
     TEAM
  MEMBERSHIP                                                  Lora Loethen  Rich Taylor

                                                                                                             53
Campaign I Leadership Decision Project Assignments:
7(a) Loan Process

        ACTION PROPOSAL                            SUGGESTED CHAMPIONS

 1. Using risk-adjusted approach,               Policy Support Rapid Action Team
    authorize uniform, unilateral authority
    for all lenders for all servicing actions
    except for those currently exempted in
    preferred lender program.


 2. Authorize SBA Servicing Centers to           Policy Support Rapid Action Team
    implement policy to not accept
    incomplete, non-required submissions
    from 7(a) lenders. (Must be executed in
    a customer-focused manner with
    supporting education and guidance to
    lenders.)




                                                                                    54
Action Proposal Bank:
7(a) Loans


 A.   Expand the Office of Lender Oversight to include evaluation and rating
      of lenders on the quality of their loan servicing and submissions to the
      SBA.
 B.   Streamline and simplify the 750 Guarantee Purchase Agreement.
 C.   Implement the use of e-signatures (eliminate the need for “wet”
      signatures).
 D.   Authorize access to SBA databases by lenders to facilitate loan
      servicing and reporting.
 E.   Develop a fully Web-based system for supporting 7(a) loans, including
      electronic forms and templates, Web-based document population, Web-
      based servicing/reporting and Web-enabled training and
      communications.




                                                                                 55
Campaign I Rapid Action Project Charters:
SBAExpress Loan Process Team


              Design and implement immediate improvements that will
              accelerate OCA toward the breakthrough vision for change
              and resigned process for servicing SBAExpress loans.
  TEAM
 MISSION


              1. Number of target improvements implemented.
              2. Reduction in weekly run rate of SBAExpress loan
                 servicing actions completed by SBA personnel.
 SUCCESS
 METRICS      3. Reduction in weekly run rate of SBAExpress loan lender
                 submission errors.
              4. Reduction in number of SBAExpress loan compliance
                 errors vs. baseline average determined by statistically
                 significant sampling.
              5. Positive feedback from SBAExpress loan lenders based
                 on customer satisfaction survey scores.


                                                                           56
Campaign I Rapid Action Project Charters:
SBAExpress Loan Process Team (Cont’d)


  TARGET
               a.   Complete design and documentation of the SBAExpress Loan Breakthrough
                    Redesign Map including detailed guidance on roles and decision-making.
IMPROVEMENTS   b.   Simplify and rewrite existing SOPs to create business rules for fully delegating
                    electronic servicing of express loans to lenders.
               c.   Develop a web-based training tool for lenders and district offices to brief on
                    guidelines for electronic servicing of loans and compliance requirements. Use as
                    platform for education on 7(a) and 504 loans including related purchase programs.
               d.   Develop a customer satisfaction survey tool that can be applied through various
                    channels (Web, email, telephone, etc.) to gauge overall satisfaction with SBA loan
                    servicing support and satisfaction on specific products.

                    Launch By: 1/19/2007                 Complete By: 3/30/2007
   CALENDAR
  MILESTONES

                    Sponsor: John Miller                            Team Members:
                                                             Vanessa Piccioni Michael Probus
                    Team Leader: Nique
                                                             Hien Nguyen      Paul Kirwin
                                 Carrington
 RECOMMENDED                                                 Joe King
     TEAM
  MEMBERSHIP

                                                                                                         57
Campaign I Leadership Decision Project Assignments:
SBAExpress Loan Process Team

        ACTION PROPOSAL                             SUGGESTED CHAMPIONS

1. Authorize the requirement that all lenders    Policy Support Rapid Action Team
   use SBA form 1149 for Transcript of
   Account to speed processing and reduce
   incoming errors.


2. Revise the “Rule of 2” SOP requirement on      Policy Support Rapid Action Team
   SBAExpress loans (test for extension to all
   7(a) and 504 loans) to consider the lender
   as first review and approval and SBA as
   second review and final decision. (single-
   pass review by SBA)




                                                                                     58
Action Proposal Bank:
Express Loans


 A.   Develop enhancements to E-Tran or alternative Web systems to
      support processing of SBAExpress loans over their entire life-cycle,
      including capabilities for electronic document management,
      E-purchase, and auto-population of forms.
 B.   Reallocate SBA servicing staffs (after reduction in current task loads)
      to customer service, backlog reduction and quality assurance
      activities.




                                                                                59
Campaign I Rapid Action Project Charters:
504 Loan Process Team


              Design and implement immediate improvements that will
              accelerate OCA toward the breakthrough vision for change
              and redesigned process for servicing 504 loans.
  TEAM
 MISSION


              1. Number of target improvements implemented.
              2. Reduction in weekly run rate of 504 loan servicing
                 actions completed by SBA personnel.
 SUCCESS
 METRICS      3. Reduction in weekly run rate of 504 loan lender
                 submission errors.
              4. Reduction in number of 504 loan compliance errors vs.
                 baseline average determined by statistically significant
                 sampling.
              5. Positive feedback from 504 lenders based on customer
                 satisfaction survey scores.


                                                                            60
Campaign I Rapid Action Project Charters:
504 Loan Process Team (Cont’d)


  TARGET
               a.

               b.
                    Complete design and documentation of the 504 Loan Breakthrough
                    Redesign Map including detailed guidance on roles and decision-making.
                    Develop a classification model and criteria for ranking and assigning
IMPROVEMENTS        Community Development Companies (CDCs) into service quality/risk
                    categories in order to support the granting of top quality CDCs delegated
                    authority for 504 loan servicing.
               c.   Develop standardized forms and templates to reduce submission errors by
                    CDCs, and mandate for use by all CDCs.
               d.   Simplify and rewrite SOPs as required to support targeted improvements.



   CALENDAR
               Launch By: 1/19/2007                  Complete By: 3/30/2007
  MILESTONES



               Sponsor: Joel Stiner                            Team Members:
                                                       Stan Nakano     John White
               Team Leader: Hollis Carter
                                                       David Miller    Michelle Serrano
 RECOMMENDED                                           Bin McConnell   Eric Benderson
     TEAM
  MEMBERSHIP


                                                                                                61
Campaign I Leadership Decision Project Assignments:
504 Loan Process


        ACTION PROPOSAL                                 SUGGESTED CHAMPIONS

 1. Authorize a risk-adjusted approach to            Policy Support Rapid Action Team
    delegating authority to approve 327
    servicing actions to top tier (qualified)
    CDCs.



 2. Authorize delegation of authority to all          Policy Support Rapid Action Team
    CDCs to execute principal financial
    documents consistent with 327 servicing
    actions.


 3. Authorize the mandatory use by all CDCs           Policy Support Rapid Action Team
    of SBA standard 504 loan forms as
    condition for specific delegation of authority
    and expedited processing.




                                                                                         62
Campaign I Rapid Action Project Charters:
Asset Recovery Process


              Design and implement immediate improvements that will
              accelerate OCA toward the breakthrough vision for change
              and redesigned process for Asset Recovery for 7(a),
  TEAM        SBAExpress, and 504 loans.
 MISSION

              1. Number of target improvements implemented.
              2. Increase in number of accurate, complete purchase
                 packages submitted by lenders.
 SUCCESS      3. Reduction in weekly run rate of recovery actions by SBA
 METRICS
                 personnel vs. baseline average.
              4. Increase in weekly rate of liquidation cases resolved vs.
                 baseline average.
              5. Increase in weekly rate of purchases completed vs. baseline
                 average.
              6. Positive feedback from lenders based on customer
                 satisfaction survey scores.

                                                                               63
Campaign I Rapid Action Project Charters:
Asset Recovery Process (Cont’d)


 
               a.   Complete design and documentation of the Asset Recovery Breakthrough Process
                    Map including detailed guidance on the single pass, consolidated review approach.
               b.   Review, simplify and standardize all liquidation and purchase forms and guidance to
   TARGET
                    facilitate error-free, complete submission of purchase packages by lenders.
IMPROVEMENTS
               c.   Develop training and communication program to educate District Office personnel and
                    lenders on new liquidation and purchase process and submission requirements for
                    expedited processing. (Work with 7(a) team to explore use of Web-based training and
                    Call Center to support this effort.)
               d.   Develop a classification model and criteria for ranking and assigning asset recovery
                    cases for action on a risk/return-adjusted basis to maximize overall recovery dollars.
               e.   Eliminate the “expedited” purchase of SBAExpress loans and communicate policy
                    changes to the lender community.
   CALENDAR
  MILESTONES   f.   Develop a uniform quality assurance program that meets regulatory standards for
                    7(a), SBAExpress, 504 loan processes.
               g.   Simplify and rewrite SOPs as required to support the targeted improvements.

                    Launch By: 1/19/2007                  Complete By: 3/30/2007

                    Sponsor: Dick Blewett                              Team Members:
                                                                Leslie Niswander     Dana Relyea
RECOMMENDED         Team Leader: Terry                          Nick Liu             Graciella Gatell
    TEAM
 MEMBERSHIP                      Hetherington                   Denis McCaghey       Jerry Johnson
                                                                Mel Bradburn         Hazel Zackery
                                                                                                             64
Campaign I Leadership Decision Project Assignments:
Asset Recovery Process

       ACTION PROPOSAL                                SUGGESTED CHAMPIONS

1. Authorize the implementation of the risk-         Policy Support Rapid Action Team
   adjusted approach to purchase and charge-off
   reviews with appropriate quality assurance
   measures. (Review all 7(a) and 504 loans up
   to $50K, with sampling reviews for $25-50K.)

2. Authorize elimination of “Rule of 3” review       Policy Support Rapid Action Team
   of liquidation actions in favor of single pass,
   consolidated review approach at time of
   purchase.

3. Authorize delegation of authority to              Policy Support Rapid Action Team
   Servicing Centers for partial denial up to
   $50,000.
4. Authorize delegation of authority for full        Policy Support Rapid Action Team
   Offer in Compromise to Servicing Centers.

5. Authorize auto purchase of SBAExpress             Policy Support Rapid Action Team
   loans less than $25,000 after all recovery
   has occurred. (i.e., eliminate the need for
   Purchase Review process on lower risk
   loans)
                                                                                        65
Asset Recovery Process:
Action Proposal Bank


 A.   Develop requirements for design and implementation of a Web-based
      loan liquidation notification system; purchase eligibility; and self-
      directed purchase processing for qualified lenders at defined dollar
      amounts.
 B.   Design and develop a system of rewards and consequences for
      lenders purchase process quality (i.e., submission of complete
      packages and timely response to requests for information).
 C.   Develop requirements for design and implementation of an electronic
      transcript system.




                                                                              66
Campaign I Rapid Action Project Charters:
Enterprise-Wide Technology Support Team


              Design and implement immediate technology improvements that
              will accelerate achievement of Rapid Action Team Charters and
              Leadership Decision Projects for 7(a), SBAExpress, 504 and
   TEAM       Asset Recovery Processes.
  MISSION

              1. Number of targeted technology solutions implemented in
                 time to support achievement of 7(a), SBAExpress, 504 and
                 Asset Recovery Campaign I goals.
              2. Ability to leverage the use of existing SBA technologies to
 SUCCESS
 METRICS         speed deployment.
              3. End-user satisfaction with solutions (SBA personnel and
                 lenders).




                                                                               67
Campaign I Rapid Action Project Charters:
Enterprise-Wide Technology Support Team (Cont’d)


  TARGET
               a. Develop Web utility/infrastructure linked to www.sba.gov to support
                  deployment of Web-based and training; easy access to forms, guidance and
                  other tools; help requests; and user satisfaction feedback that can be used
                  across all loan processes. (Use Herndon site as a base.)
IMPROVEMENTS
               b. Extend E-Tran functionality to loan servicing, providing lenders with Web-
                  based capability to perform electronic loan servicing.
               c. Investigate options and pilot test an electronic document storage utility with
                  easy-to-use search capability to support the transition from paper to electronic
                  filing.
               d. Investigate options and pilot test extensions of E-Tran/GPTS interface to
                  facilitate end-to-end electronic loan processing.


   CALENDAR
  MILESTONES
               Launch By: 1/19/2007                  Complete By: 3/30/2007

               Sponsor: Christine Liu and                          Team Members:
                        Jim Hammersley                       Rick Geyer    Hien Nguyen
               Team Leader: Steve Kucharski                  Rick Adams    Ron Whalen
RECOMMENDED                                                  Ray Baca      Mike Avant
    TEAM
 MEMBERSHIP

                                                                                                     68
Campaign I Rapid Action Project Charters:
Enterprise-Wide Policy Support Team


              Facilitate approval of global policy changes to support rapid
              execution of Campaign I objectives as well as policy changes to
              support specific Rapid Action Team Charters and Leadership
   TEAM       Decision Projects for 7(a), SBAExpress, 504 and Asset
  MISSION
              Recovery Processes.

              1. Number of targeted policy revisions approved in time to
                 support achievement of 7(a), SBAExpress, 504 and Asset
                 Recovery Campaign I goals.
              2. Ability to work cooperatively across oversight departments to
 SUCCESS
 METRICS         gain consensus on policy revisions that streamline work with
                 no loss (and if possible, improvement) in compliance to
                 regulatory requirements.
              3. Reduction in compliance errors across all loan processes vs.
                 baseline averages determined through statistically significant
                 sampling.



                                                                                  69
Campaign I Rapid Action Project Charters:
Enterprise-Wide Policy Support Team (Cont’d)


 
               a.   Develop and confirm with OGC and communicate the minimum documents required
                    by SBA from lenders to ensure compliance for 7(a), SBAExpress, 504 and Asset
                    Recovery.
   TARGET
               b.   Develop and confirm with OGC and communicate a set of clear guidelines for
IMPROVEMENTS
                    introducing new procedures, guidance and training to District Offices and lenders to
                    promote compliance and avoid conflict or misinterpretation.
               c.   Create OGC- and OIG-supported guidance for adopting a risk-adjusted approach to
                    delegation of authority to lenders; allocation of oversight resources and time to highest
                    risk/highest return opportunities; reduction in oversight and lender-based QA in low
                    risk transactions.
               d.   Create OGC- and OIG-supported guidance for risk-adjusted statistically valid
                    sampling-based approached to quality assurance and auditing.
               e.   Investigate and develop a proposal for addressing the end-to-end 1502 process
   CALENDAR         (including error correction) in order to improve compliance and free up SBA Servicing
  MILESTONES        Center personnel for customer service and quality assurance activities.


                    Launch By: 1/19/2007                   Complete By: 3/30/2007

                    Sponsor: Janet Tasker                               Team Members:
                                                                   Nina Levine        Charles Thomas
 RECOMMENDED
     TEAM
                    Team Leader: Walter Intlekofer                 Bryan Hooper       Jim Hammersley
  MEMBERSHIP                                                       David Dickson      John Wade
                                                                   John Miller        Jenni Main
                                                                                                                70
Campaign I Leadership Decision Project Assignments:
Enterprise-Wide Support Teams

       ACTION PROPOSAL                                 SUGGESTED CHAMPIONS


 1. Engage SBA Office of the Inspector General in       Policy Support Team
    a productive discussion to shift their role from
    policy review and decision making to auditing
    for regulatory compliance and effectiveness of
    process controls to ensure high performance.




                                                                              71
Rapid Improvement Campaign I
Campaign Results Scorecard Framework


                     SOLUTION IMPLEMENTATION VELOCITY

                    Solutions
                    Targeted    Solutions     Solutions
                       for      Underway      Completed
                   Deployment




                   PERFORMANCE IMPROVEMENT VS. BASELINE
                                                 Asset
                     7(a)   Express    504      Recovery    Total
      Processing     xxx        xxx         xxx       xxx    xxx
      Efficiency

      Compliance     xxx        xxx         xxx       xxx    xxx

      Customer       xxx        xxx         xxx       xxx    xxx
      Service

      Asset          xxx        xxx         xxx       xxx    xxx
      Recovery




                                                                    72
 First-Draft Top Level Loan Processing Scorecard


Performance            Customer                     Processing                           Asset                       Compliance to
Category                Service                      Efficiency                         Recovery                      Regulations/
                                                                                                                       Standards
Critical        Timely response to           Minimal SBA “touches” per            Ability to maintain target     Minimal loan processing
Performance      inquiries                     loan                                  purchase rate levels            compliance errors
Expectations    Clear consistent guidance    No processing wait time due          Maximum dollars
                                               to SBA                                recovered on total
                Courtesy                                                            purchase
                                              Industry comparable cost per
                East-to-access/               loan processed
                 understand/use forms,
                 tools & resources            Ability to meet volume
                                               surges

                Response time on all         Total labor hrs per loan             Performance vs. target         Number of QAR errors per
Metrics          incoming inquiries                                                  purchase rates by loan          audit
                                              Turn time on critical                 type. Risk rating
                Customer satisfaction         processing actions                                                   Number of IPIA errors per
                 survey scores                                                      Dollars recovered vs. total     audit
                                              Total cost per loan processed         value of purchase by loan
                Customer complaints                                                                                Number of lender errors
                                              Backlog level and aging               type/ risk rating
                                                                                                                     (inaccurate/incomplete
                                                                                                                     submissions)
                                                                                                                    Level of SBA rework
Breakthrough    24 hr response or less on    95% adherence to touch time          95% achievement of             50% reduction in QAR
Goals            all inquiries                 standards (by loan type)              purchase rate targets           errors vs. historical
                                                                                                                     baseline
                80-90% top box score on      95% adherence to turn time        95% achievement of
                 customer surveys              standards (by processing action)   recovery rate targets             50% reduction in IPIA
                                                                                                                     errors vs. historical
                Elimination of recurring     98% adherence to target cost per                                      baseline
                 complaints                    loan
                                                                                                                    50% reduction in lender
                                              Recovery to target backlog within                                     errors vs. historical
                                               5 days of surge                                                       baseline
                                                                                                                    75% reduction in SBA
                                                                                                                     rework tasks


                                                                                                                                                 73
Notional Dashboard for 7(a), SBAExpress and 504 Loan
Portfolios


 Loan Product Portfolio
Loan Product Portfolio
Loan Product Portfolio

Portfolio Health
Outstanding Portfolio Value:                                 $x                                                                                                        Outstanding Portfolio Volume:      x# 

 Processing Efficiency                                                Asset Recovery                                                                                        Customer Service                Compliance
                                                                       Little Rock Service Center SBA Express Liquidation Portfolio - Purchased vs. Unpurchased Loans
                                                                                        (Historical by month end and showing end of most recent month.)
                                                      4000




                                                      3000
                                    Number of Loans




                                                      2000




                                                      1000




                                                         0

                                                             Feb-06   Mar-06        Apr-06           May-06         Jun-06       Jul-06        Aug-06         Sep-06
                                                                                                         Month/Year

                                                                                             Total      Purchased      Un-purchased




                                    Purchase Rate                                                                                                  x%                   Timely Response      x      IPIA Compliance   x%
Turn Time for Key Actions   x   
                                    Recovery Rate                                                                                                  $x                   Cust. Satisfaction   x      QAR Compliance    x%
Backlog                     x   
Labor Hrs/loan              x                                                                                                                                           Web Site Visits      x   
Total Cost per loan         x   




                                                                                                                                                                                                                             74
Rapid Improvement Campaign I
Proposed Campaign Calendar and Milestones

        EVENT/MILESTONE                         PARTICIPANTS                  TARGET DATE
1.   Jumpstart Report and confirm Rapid              Campaign                     12/15/06
     Action Team and Leadership Decision          Leadership Team
     Assignments

2.   Launch Rapid Action Teams and                  All Assigned              Weeks of 1/8/07
     Leadership Decision Projects                   Resources                 through 1/19/07
     (2-Day Event)

3.   Rapid Action Team and Leadership               All Assigned              Weekly Meetings
     Decision Project Execution                     Resources                    (1-2 Hrs)


4.   Executive Review Support               Campaign Leadership Team,         Weekly Conf. Call
                                           Rapid Action Team Leaders and           (1 Hr)
                                           Leadership Decision Champions
5.   Campaign Mid-Point Progress Check      Campaign Leadership Team,         Weeks of 2/18/07
     (1-2-Day Event)                       Rapid Action Team Leaders and         to 2/25/07
                                           Leadership Decision Champions

6.   Campaign Listen, Learn & Leverage     All assigned resources for Wrap-   Weeks of 3/26/07
     Meeting (3 Day Wrap-Up Meeting:        Up and Report Out/Campaign           or 4/2/07
     1 Day for Rapid Action teams          Leadership Team for Campaign II
     1 Day Combined Report Out Meeting             Planning Meeting
     1 Day Campaign II Planning Meeting)
                                                                                                  75
Keys to OCA Rapid Improvement
Campaign I Success


              > “CLOCK MANAGEMENT”
                All Rapid Action Teams and Leadership Decision Project
                champions must stick to the discipline of completing weekly
                action assignments; reporting/progress; and, pushing up
                barriers to the Campaign Board for resolution.
              > “RAPID BARRIER REMOVAL”
                The Campaign Board working with the Campaign Executive
                Sponsors must operate with a “no waiting on decisions”
                mentality and practice. As soon as barriers are surfaced by
                teams and champions and solutions recommended, the
                board must spring to action with clear direction to maintain
                momentum.
              > “NO FILIBUSTERING”
                OCA leaders and other SBA Executive Sponsors must
                operate with “full disclosure” of agendas. Reasons not to
                support recommended action must be articulated and backed
                with facts and data. The burden of proof must be balanced.


                                                                               76
 Appendix


Loan Processing Dashboard and Scorecards
Measuring Campaign Success:
Notional Dashboard for 7(a), SBAExpress and 504 Loan Portfolios

 Loan Product Portfolio
Loan Product Portfolio
Loan Product Portfolio

Portfolio Health
Outstanding Portfolio Value:                                 $x                                                                                                        Outstanding Portfolio Volume:      x# 

 Processing Efficiency                                                Asset Recovery                                                                                        Customer Service                Compliance
                                                                       Little Rock Service Center SBA Express Liquidation Portfolio - Purchased vs. Unpurchased Loans
                                                                                        (Historical by month end and showing end of most recent month.)
                                                      4000




                                                      3000
                                    Number of Loans




                                                      2000




                                                      1000




                                                         0

                                                             Feb-06   Mar-06        Apr-06           May-06         Jun-06       Jul-06        Aug-06         Sep-06
                                                                                                         Month/Year

                                                                                             Total      Purchased      Un-purchased




                                    Purchase Rate                                                                                                  x%                   Timely Response      x      IPIA Compliance   x%
Turn Time for Key Actions   x   
                                    Recovery Rate                                                                                                  $x                   Cust. Satisfaction   x      QAR Compliance    x%
Backlog                     x   
Labor Hrs/loan              x                                                                                                                                           Web Site Visits      x   
Total Cost per loan         x   




                                                                                                                                                                                                                             78
Loan Product Portfolio Processing Efficiency Metrics



Rapid Improvement Campaign Breakthrough Rationale:
   Lender will assume greater authority and responsibility for servicing actions
   Lender will provide the first review for the Rule of 2
   SBA FTA (Colson Services) will assume greater authority to correct 1502 Report errors




                                                                                            79
Loan Product Portfolio Asset Recovery Metrics


Rapid Improvement Campaign Breakthrough Rationale:
     Consolidate liquidation oversight reviews to follow guaranty purchase
     Delegate authority to lenders to complete liquidation and purchasing actions
     Develop electronic submission of documents based on standard forms
     Improve lender outreach and education




                                                                                     80
Loan Product Portfolio Customer Service Metrics


Rapid Improvement Campaign Breakthrough Rationale:
   Provide self-service tools to lenders
   Increase outreach and training events for lenders




                                                        81
Loan Product Portfolio Compliance Metrics


Rapid Improvement Campaign Breakthrough Rationale:
   Continue to comply with Federal Regulations, including Improper Payments Information Act




                                                                                               82
Loan Product Portfolio Health Metrics


 Rapid Improvement Campaign Breakthrough Rationale:
       Continue to assess overall portfolio health




* Measurement Data Sources To Be Determined and/or Validated




                                                               83

								
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