Best Practices: Nuances of the Eligible Passive Company Rule
One of the basic tenets of SBA lending is that an applicant must be an active operating business. SBA prohibits financing assets that are held for their passive income, with one exception – the Eligible Passive Company (EPC) Rule. Because the EPC Rule is an exception to SBA’s general policies, the SBA interprets it strictly. ... Read More
Best Practices: Nothing Reasonable About “Reasonable Attorney Fees” In Confession Of Judgment Provisions
When it comes to SBA lending, all participating lenders are no strangers to loan documents that include confession of judgment provisions (“COJ Provisions”). By way of background, COJ Provisions are written statements typically found in mortgages, deeds of trust, promissory notes and guarantees (“Loan Documents”). COJ Provisions are conspicuous and are typically accompanied by a ... Read More
Best Practices: Impending Mandatory Changes to Florida Notarial Certificates for Acknowledgments and Jurats
Effective January 1, 2020, Florida law requires new language to be used in ALL notarial certificates for acknowledgments and jurats pursuant to House Bill 409 (“HB 409”)/Session Law Chapter 2019-71, which was signed into law in June 2019. Failure to include this additional language may: (i) cause the clerk of the court to reject the ... Read More
Best Practices: How to Deal with a Subpoena for a Customer’s Bank Records
Banks are repositories for vast amounts of financial information. This information may be useful to parties in lawsuits in which the bank is just an innocent bystander. Banks often receive requests for financial information in matters in which the bank has no direct involvement. However, banks have duties to their customers to maintain the confidentiality ... Read More
Best Practices: Closing Instruction Letters
The last few days before a closing can be a hectic time. Each party has its own responsibilities and everyone must make sure that there is an agreement as to when and how a closing will occur. No matter how chaotic this time can be, lenders should consider preparation of written closing instructions to be ... Read More
Best Practices: SBA Seeking Comments to its Export Loan Programs
On September 17, 2019, SBA provided an advance notice of proposed rulemaking (“ANPRM”) seeking the public’s comments to changes to the regulations governing SBA’s Export Loan Programs in an ongoing effort to increase lender participation and usage of such programs. See 84 FR 48807, RIN: 3245-AG95. According to the SBA, small to medium sized businesses ... Read More
