Best Practices: Bulk Sales and Successor Liability Laws
Buying a business is an exciting time and allows the new business owner to look forward to all of the great things that they hope to accomplish. In most cases, a buyer is not liable for the unpaid taxes of the seller unless the buyer expressly agrees to assume them. However, some states have enacted ... Read More
Best Practices: Proceed with Caution – Consulting Agreements
Financing a business acquisition is an eligible use of SBA 7(a) loan proceeds, provided, that certain conditions are met. One of those conditions is that a seller is required to divest his/her interests completely from the business to be sold (with the specific exceptions regarding loans to purchase an employee stock ownership plan (ESOP) or ... Read More
Best Practices: SBA Offers In Compromise
With the current uptick in SBA loan defaults, lenders should ensure that their loan servicing teams familiarize themselves with the SBA’s offer in compromise (“OIC”) process. A lender may not settle a borrower or any guarantor’s liability on a defaulted SBA loan without SBA approval. All settlement requests made by borrowers or guarantors to settle ... Read More
Best Practices: Due Diligence in 7(a) Loans secured by Commercial Real Estate: Surveys
Borrowers undertaking a U.S. Small Business Administration (“SBA”) 7(a) loan often ask lenders whether a new survey will be required to close. This is a complex question and often, the answer will not be available until, at a minimum, the title insurance commitment is prepared by the title agent. Types of Loan Policies and the ... Read More
Best Practices: Evaluating the Risk of Real Estate Encroachments
When U.S. Small Business Administration (“SBA”) loan proceeds are used to finance the acquisition of commercial real estate, a title policy is obtained to protect the interests of the bank and the borrower. During the loan due diligence phase, the bank must thoroughly review exceptions that appear on the title commitment and survey, if available, ... Read More
SBA’s Vendor/Technology Selection Requirements for Lenders Utilizing Electronic Signatures
A growing number of SBA lenders are utilizing electronic signatures on their SBA forms and documents, including loan documents, which require a signature. SBA lenders must be mindful of the strict requirements placed by the SBA on the technology utilized to obtain electronic signatures. SBA lenders who fail to adhere to the standards prescribed by ... Read More