**[504 Lender Analysis & Management Program (504 LAMP)]{.underline}**

**[Definitions]{.underline}**

I.  **[DATA SOURCES]{.underline}**

    A.  SBA Databases

    B.  Bank of New York Debenture Database

    C.  Colson Status of Portfolio

    D.  Colson Funding Errors

II. **[504LAMP GENERAL NOTES]{.underline}**

    A.  All loans in 504LAMP are 504 loans; loans funded through the 503
        program are not included.

    B.  For 504LAMP purposes, CDCs are only accountable for loans funded
        by the CDC. Loans inherited from ADCs or other CDCs are not
        counted.

III. **[STANDARD TERMS]{.underline}**

     A.  [Debenture (from 13 CFR 120.802):]{.underline} "An obligation
         issued by a CDC and guaranteed 100 percent by SBA, the proceeds
         of which are used to fund a 504 loan." The debenture is
         amortized on a semi-annual basis.

     B.  [504 Loan:]{.underline} The obligation owed by the small
         business concern that received assistance. The loan is
         amortized on a monthly basis.

     C.  [Loan Approvals]{.underline}: All 504 loan applications
         approved by the CDC and SBA.

     D.  [Debentures Issued:]{.underline} All 504 loan applications that
         were funded by the CDC.

     E.  [Total Active Portfolio:]{.underline} Sum of all 504 loan
         balances for debentures issued by the CDC that are not paid in
         full, charged-off or sold in an asset sale.

     F.  [Total Dollar Amount of Debentures Issued:]{.underline} Sum of
         all 504 gross debentures issued by the CDC.

     G.  [Servicing Portfolio:]{.underline} Sum of all 504 loan balances
         for debentures issued by the CDC that have not been purchased
         or paid in full.

IV. **[504LAMP LOAN STATUS CODES]{.underline}**

> Every 504 loan is assigned one status code from the list below on a
> monthly basis.

A.  [Asset Sale:]{.underline} The loan has been sold in an asset sale.

B.  [Charged-Off:]{.underline} The remaining balance of the loan has
    been charged-off by SBA.

C.  [Paid in Full:]{.underline} The loan is paid in full as a result of
    the borrower making all of its payments.

D.  [Paid in Full (Liq):]{.underline} The loan is paid in full as a
    result of a default and full recovery.

E.  [Prepaid in Full:]{.underline} The loan is paid in full as a result
    of a prepayment action on the part of the borrower.

F.  [Prepayment Pending:]{.underline} The paperwork and deposit have
    been received for a prepayment of the loan and debenture.

G.  [In Liquidation:]{.underline} The debenture has been purchased by
    SBA, the loan accounting has been transferred to SBA, and the loan
    has not been charged-off, paid in full, or sold in an asset sale.

H.  [Purchase Pending:]{.underline} The debenture is scheduled for
    purchase by SBA (and the loan is accelerated).

I.  [Catch-Up:]{.underline} The loan is in an SBA approved catch-up
    period and the catch-up period is reflected on Colson's Status of
    Portfolio Report.

J.  [Deferment:]{.underline} The loan is in an SBA approved deferment
    period and the deferment is reflected on Colson's Status of
    Portfolio Report.

K.  [\[#months\] Past Due:]{.underline} The loan is past due by the
    number of months in the brackets according to the Colson Status of
    Portfolio Report.

L.  [Current:]{.underline} The loan is current in its payments and has
    not been purchased by SBA.

M.  [Canceled:]{.underline} The loan was approved and subsequently
    canceled by SBA.

N.  [Not Funded:]{.underline} The loan was approved and either was NOT
    canceled or has not funded to date.

```{=html}
<!-- -->
```
V.  **[Tier Definition/Calculation]{.underline}**

    A.  [Tier:]{.underline} A grouping assigned to a CDC based upon the
        NUMBER of 504 debentures issued by the CDC. The calculation
        groups CDCs of similar size without regard for the number of
        CDCs in a tier. The top tier (currently "Tier 7") only contains
        1 CDC. Since CDCs that move into this Tier will have issued so
        many more 504 debentures than those in the previous tier, they
        are/will be grouped together. Conversely, some of the lower
        tiers have 50 or more CDCs, since these CDCs represent the
        "average" range for the tier calculation. The calculation is
        updated monthly and allows a CDC to "grow" into new tiers.

    B.  [The mathematical calculation]{.underline} that determines a
        tier is the cube root of the CDC's portfolio size in dollar
        terms. New tiers will be added automatically as the CDC universe
        further diversifies.

VI. **[Risk Management Benchmarks]{.underline}**

    A.  [Currency Rate:]{.underline} The sum of the 504 loan balances
        that are 0 to 30 days current compared to the Total Active
        Portfolio for that CDC.\
        \
        Passing level: ≥87.00%

    B.  [Delinquency Rate:]{.underline} The sum of the 504 loan balances
        that are more than 2 months past due compared to the Total
        Active Portfolio for that CDC.\
        \
        Passing level: ≤10.50%

    C.  [Default Rate:]{.underline} The sum of the 504 debenture
        principal and interest paid by SBA to the investor on defaulted
        loans compared to the Total Dollar Amount of Debentures Issued
        by the CDC.\
        \
        Passing level: ≤10.4%

    D.  [Liquidation Rate:]{.underline} The sum of the 504 loan balances
        that are in liquidation compared to the Total Active Portfolio
        for the CDC.\
        \
        Passing level: ≤5.90%

    E.  [Loss Rate:]{.underline} The sum of the 504 loan balances that
        are charged-off or sold in an asset sale compared to the Total
        Dollar Amount of Debentures Issued by the CDC.\
        \
        Passing level: ≤4.9%

VII. **[504 Benchmarks]{.underline}**

> The 504 benchmarks are to be used as tools to further analyze a CDC's
> performance.

A.  [Portfolio Diversity:]{.underline} The number of SIC/NAICS codes
    that have 504 debentures issued compared with the total number of
    504 debentures issued. The larger this ratio, the more diverse the
    CDC's portfolio.

B.  [Quick Default Rate:]{.underline} The Default Rate calculated for
    loans funded within the previous 24 months.

C.  [Quick Currency Rate:]{.underline} The Currency Rate calculated for
    loans funded within the previous 24 months.

D.  [Aged Default Rate:]{.underline} The Default Rate calculated for
    loans funded more than 24 months ago.

```{=html}
<!-- -->
```
VIII. **[Other Information on the CDC at a Glance]{.underline}**

      A.  [Tot Active Port:]{.underline} The number and sum of 504 loan
          balances (in millions) in the CDC's Total Active Portfolio.

      B.  [Apprvls This FY:]{.underline} The number of 504 loan
          approvals by the CDC for this fiscal year.

      C.  [Apprvls Last FY:]{.underline} The number of 504 loan
          approvals by the CDC for the last complete fiscal year.

      D.  [Apprvls 2 FY Ago:]{.underline} The number of 504 loan
          approvals by the CDC 2 complete fiscal years ago.

      E.  [Fundings This FY:]{.underline} The number of debentures
          issued by the CDC this fiscal year.

      F.  [Currency Incl. Defers:]{.underline} The Currency Rate for the
          CDC IF loans in deferment and catch-up periods were counted as
          current.

      G.  [Unfunded 3 FY:]{.underline} The number of loans approved 3
          fiscal years ago that never funded compared to the total
          number of approvals 3 fiscal years ago.

      H.  [Funding Error Rate:]{.underline} The number of funding errors
          reported by Colson this fiscal year compared to the number of
          debentures issued by the CDC this fiscal year.

      I.  [Jobs/\$50K:]{.underline} The CDC's job creation/retention
          ratio for loans approved this fiscal year only.

      J.  [Minorities:]{.underline} The percentage of 504 loan approvals
          by the CDC to minority borrowers this fiscal year compared to
          the total number of 504 loan approvals by the CDC this fiscal
          year only.

      K.  [Women:]{.underline} The percentage of 504 loan approvals by
          the CDC to women-owned businesses (51% or more woman ownership
          and control of the daily operations) this fiscal year compared
          to the total number of 504 loan approvals by the CDC this
          fiscal year only.