Wells Fargo has announced that is has been chosen by the U.S. Small Business Administration as the new Central Servicing Agent for the 503/504 loan program. The bank will assume the role for the next five years, taking over for Bank of New York Mellon.
The 503/504 program consists of over 57,000 small business loans, with a total portfolio of about $23.6 billion. According to Wells Fargo, the program increases by about 7,000 new loans per year. Accounting firm PwC US will also help manage the program, primarily through a dedicated team that has been established in Columbia, Maryland. This new team will be overseen by Brian Bartlett, head of corporate trust services at Wells Fargo.
The partnership between PwC and Wells Fargo is responsible for the management and processing of loan and debenture payments, disbursements, fees, and prepayments. Investor reporting on debentures and government reporting on portfolio statistics also fall under the joint organization’s purview.
The 503/504 program is designed as a source for small businesses to secure long-term, fixed-rate loans for fixed assets, such as real estate. It is also accessible to certified development companies that provide real estate financing to small businesses.
Brian Bartlett said of his bank’s new role “Wells Fargo is honored to be chosen by the U.S. Small Business Administration…We are excited to team with PwC to administer existing and new small business loans through this program.” Vice president of corporate trust services Shana Stephens Murray said “They [the SBA] were interested in Wells because of our robust technology and the personnel we were able to dedicate to this program.”
Berry, Kate. “SBA Picks Wells Fargo as Servicing Agent” American Banker, 10/1/12.