Best Practices: When to require a Borrower Opinion of Counsel in a 7a loan
Legal opinion letters are an integral part of business and commercial transactions and financing. In fact, on large dollar 7(a) loans or complex change of ownership transactions, Lenders often require Borrower Opinion of Counsel letters. When written by experienced attorneys, these letters help alleviate Lender concerns about the Borrowers’ and Guarantors’ legal status, smooth the ... Read More
Best Practices: Prohibition Against Refinancing Short-Term Interim Loans Revisited by SBA
Last October, SBA added a new provision to its SOP prohibiting lenders from using a 7(a) loan to “refinance a short-term obligation that was created with the intent of refinancing it with a 7(a) loan.” SOP 50 10 6, Part 2, Section B, Chapter 1, Paragraph A.1.b.iii., page 228. The change in the SOP was ... Read More
Best Practices: Getting the SBA Fundamentals Right
In these uncertain times, SBA lenders are often overwhelmed by the myriad rules, regulations and guidelines associated with SBA lending. However, by focusing on a handful of core concepts, Lenders can develop the tools which, when applied consistently to their SBA operations, will help them to understand SBA requirements in various situations and circumstances, and ... Read More
Best Practices: Why do we need landlord waivers anyway?
SBA requires landlord waivers whenever SBA loans are secured with business personal property which is located at a leased location in order to protect the SBA and maximize any recovery when collateral must be liquidated. Lenders often ask us for guidelines as to when and under what circumstances landlord waivers may be waived. Unfortunately, there ... Read More
Best Practices: SBA Enhances its Disaster Loan Program to Meet the Needs of Small Businesses Impacted by the COVID-19 Delta Variant
Effective September 8, 2021, SBA enhanced its COVID-19 Economic Injury Disaster Loan (EIDL) program to assist small businesses to meet their financial obligations and operating expenses despite the suffering created by the Delta variant. With over $150 billion in funding available, SBA is determined that small businesses receive the help they need to survive, especially ... Read More
Best Practices: Vessel Collateral
A vessel is defined by Merriam Webster as “a watercraft bigger than a rowboat.” There are many small businesses whose main assets consist of vessels, such as local fishermen, small cruise companies, boat rental companies, and parasail companies to name a few. When such a company comes to a lender for financing, the lender ... Read More
