Best Practices: Flood Insurance Requirements under 50 10 6
Weather disasters and flooding can significantly impact a small business’s viability. When businesses financed with SBA loans suffer damages from flooding, losses can extend to the lenders that advanced the loans as well as to the SBA. Therefore, it is crucial for SBA lenders to understand when flood insurance needs to be obtained under the ... Read More
Best Practices: PPP Loan Lender Liability
Shortly after the CARES Act was enacted, and the PPP loan program began, the lawsuits started. From the beginning, there was concern that the PPP loan demand would exceed the amount of funding resulting in legal battles. Class action lawsuits were filed claiming that the “first come, first served” rule was being ignored by large ... Read More
Best Practices: SBA Guaranty Denials and the New Process for the Final Notice
Any lender that has received a recommendation for a guaranty denial from the SBA is familiar with the process involved. A lender submits its guaranty purchase package to the Agency. In most cases, SBA honors the guaranty and will purchase the guaranteed portion of the loan. However, if it does not, a back and forth ... Read More
Best Practices: Considerations for SBA Loans Financing Improvements on Leased Land (Ground Leases)
When financing improvements on leased land, it is important to consider the ways in which an SBA lender can adequately secure its loan. The purpose of this article is to highlight the analysis the lender should complete and documentation the lender should obtain to remain in compliance with SBA rules and requirements when financing improvements ... Read More
Best Practices: Protecting Your Mortgage’s Priority From Mechanic’s Liens
Mechanic’s lien laws are statutes that exist in every state to protect contractors, subcontractors and material suppliers that furnish work or materials to construction projects. As the name suggests, these laws allow contractors, subcontractors and suppliers to impose a lien on an owner’s property if the property has been improved by the goods, labor or ... Read More
Best Practices: The Importance of a Closing Protection Letter
Most participating lenders are aware that under the current version of the Standard Operating Procedure 50 10 6 (“SOP”), U.S. Small Business Administration (“SBA”) loan proceeds may be used to finance the acquisition of commercial real estate. Compulsory evidence of lien priority on these types of transactions often require the lender obtain a loan title ... Read More
