Best Practices: SBA’s Guidance on Submitting Guaranty Purchase Requests for PPP Loans
Effective July 15, 2021, SBA issued Procedural Notice 5000‑812316, “SBA Guaranty Purchases and Lender Servicing Responsibilities for PPP Loans.” The Notice provides critical guidance on how lenders should service their PPP loans and submit purchase submissions. In her article published on July 28, 2021, my colleague reviewed the servicing requirements for PPP loans. In this ... Read More
Best Practices: Current Guidance on Lender Servicing Responsibilities for PPP Loans and SBA Guaranty Purchases
In SBA Procedural Notice 5000-812316 effective July 15, 2021 (“Notice”), the Small Business Administration (“SBA”) sets forth a lender’s responsibilities for servicing and resolving unforgiven Paycheck Protection Program (“PPP”) loans, and it provides guidance on the processes required in order for SBA to purchase the PPP loan and honor its 100% guaranty. The Notice makes ... Read More
Best Practices: Navigating Title Commitments in Commercial Lending
When documenting a commercial loan for financing the acquisition of real estate or when there is real estate as collateral for your commercial loan, you will likely require a loan title insurance policy to verify ownership and lien position. A title commitment will include details as to the named insured and amount of insurance as ... Read More
Best Practices: Funding Equity Injection through a Corporate Affiliate
Although funding equity injection through a borrower’s affiliated entity is not an uncommon practice, lenders must exercise care in these circumstances. On many occasions, such transfers of funds from the affiliate to a borrower are characterized as gifts. This is problematic as corporations do not “gift” monies to other corporations; corporations have a duty to ... Read More
Best Practices: Perfecting Liquor License Liens
SBA loans are often used to finance restaurants, liquor stores or other retail establishments that sell, and in some cases, serve, alcoholic beverages to their customers. As SBA lenders structure their loans for these businesses and determine what collateral is required for their loans, questions may arise regarding whether a lien can be placed on ... Read More
Best Practices: Purchase Money Security Interests: Considerations for specific assets purchased with SBA loan proceeds
Generally, an SBA lender will need to secure its loan with a perfected security interest in specific equipment purchased, or to be purchased, with loan proceeds. Lenders must take special care to ensure lien priority and perfection of these purchase-money security interests in equipment (“PMSI”); particularly if such equipment has significant value. Prior to loan ... Read More
