Best Practices: Revised SBA Form 1919 Analysis: Part 1 – Who is Required to Sign?
Pursuant to SBA Information Notice 5000-17007, effective October 12, 2017, SBA has issued a revised Form 1919. One of the most notable changes is that Form 1919 is now split into two sections, each of which is completed and executed by different parties. The first section contains the Applicant business information, while the second section ... Read More
Best Practices: Tips When Reviewing Commercial Real Estate Purchase Agreements
Here are some recommendations to assist with your review of commercial real estate purchase agreements: – Check the purchase agreement to make sure that the buyer on the purchase agreement is your borrower and that the entity name matches the entity documents. – If the parties are attempting to assign the purchase agreement to your ... Read More
Best Practices: E-Tran – Unilateral Modifications
Effective February 1st, 2015, the Small Business Administration (the “SBA”) updated its Servicing and Liquidation Actions 7(a) Lender Matrix (the “Matrix”) to include circumstances when all 7(a) lenders would be required to notify the SBA of certain unilateral servicing and liquidation actions through E-Tran, including loans that are in “approval,” “regular servicing,” or “liquidation” status ... Read More
Best Practices: Management Agreement Affiliation Determinations
Over the last several years, the use of “Management Agreements” has become a much more common method by which small businesses are choosing to run their businesses. In industries as diverse as hospitality, self-storage, and even professional services, the use of management agreements has become commonplace. However, the use of a management agreement for a ... Read More
Best Practices: Existing Third Party Tenants and EPC/OC Leases
Generally, SBA loans are made to operating businesses. An exception are loans made to Eligible Passive Companies (“EPCs”), those that use loan proceeds to acquire, and/or improve or renovate real or personal property (“Project Property”) leased to one or more Operating Companies (“OCs”) for conducting the OC’s business. (13 CFR 120.111). The EPC/OC rule, which ... Read More
Best Practices: Keeping Your Employees Current On SBA Requirements
A successful SBA lender will insure that its employees who deal with SBA loans, whether daily or just occasionally, are well trained in SBA requirements, processes, and procedures. Knowing where to turn for training and how to find relevant information is key to staying in good standing with SBA and protecting SBA loan guarantees. Training ... Read More