Guaranties are typically required on SBA loans, and while it is generally clear who must provide a full unconditional guaranty, it is more of a grey area when it comes to who must sign a limited guaranty for a particular transaction. Lenders must be cognizant of when limited guaranties may be required in order to ... Read More

As a continuation to the article Best Practices: General Title Exceptions – Part 1, this article will continue the overview of “general title exceptions”, which typically appear in an ALTA loan policy. Most of the general title exceptions should be addressed with the title agent by the lender (or lender’s counsel) so that: (i) they do ... Read More

Because many SBA loans are under-collateralized, the SBA guaranty is often the most valuable piece of “collateral” to a lender. Because of this, it is imperative that lenders avoid the common pitfalls that can lead to impairment of the guaranty, whether in the form of a repair or a denial. Failure to obtain the correct ... Read More

Recently my colleague, Norman E. Greenspan, wrote an article about the newly enhanced role of the Office of Credit Risk Management (“OCRM”) when it comes to evaluating lenders’ conduct in complying with the Standard Operating Procedures (“SOP”) and other Small Business Administration (“SBA”) rules, regulations and guidelines. The purpose of this article to expand on that point in ... Read More

SBA Lenders often wonder about what public records searches they must order as part of their due diligence when processing an SBA loan. Unfortunately, the SBA does not specify any requirements for performing searches, instead specifying the requirements for collateral and underwriting and leaving it up to lenders to engage in “prudent lending” to fulfill ... Read More

Last year, the President signed into law the Small Business 7(a) Lending Reform Act of 2018, Pub. L. 115-189 (“SBA Reform Act”) that amended the Small Business Act, 15 U.S.C. §651 et seq.  The Small Business Act is the statute that created and governs the Small Business Administration. Initially, the focus of the guaranteed lending ... Read More