Best Practice: SBA Requirements for IRS Tax Transcripts
https://starfieldsmith.com/wp-content/uploads/2024/03/dc19ead2-4856-4fb9-93e0-80423b7a0f94.mp3 A crucial step of underwriting and closing an SBA loan is verification of the SBA applicant’s financial information and tax returns. SOP 50 10 7.1 sets forth specific tax verification guidance and requirements at pages 72-74. Read on to find out the who, what, when, why and how. What is the purpose of SBA’s ... Read More
Best Practices: ESOPs Under SOP 50 10 7.1
https://starfieldsmith.com/wp-content/uploads/2024/03/5f8373d7-1875-4dc1-8f62-2eaaa40b78f8-1.mp3 SOP 50 10 7.1 has modified requirements on ESOP lending and made it easier for lenders to provide financing to ESOPs and/or financing resulting in the ESOP purchasing a controlling interest (at least 51 percent) in the employer small business. An employee stock ownership plan (“ESOP”) is a type of employee benefit plan in ... Read More
Best Practices: Requirements for the Universal Purchase Package
https://starfieldsmith.com/wp-content/uploads/2024/03/a4d5ccff-6481-4ca4-9c2f-563d821d03cd.mp3 On August 1, 2023, the SBA unveiled its new streamlined Guaranty Purchase package. The new Universal Purchase Package (UPP) now takes the place of the former SBA 10 Tab Package. There are now 8 Tabs, instead of the previous “10 Tabs” that Lenders were required to submit. While the guaranty purchase package has changed, ... Read More
Best Practices: Bridging the Gap with Interim Advances
https://starfieldsmith.com/wp-content/uploads/2024/03/6ad559dc-fa28-4dfb-b6aa-24f346565790.mp3 Since the SBA 7a program is designed to expand access to capital for small businesses who cannot obtain credit elsewhere, lenders must ensure that all diligence items have been cleared before moving forward with closing. As such, it is generally understood that a closing for an SBA 7a loan can take some time due ... Read More
Best Practices: EIDL Lien Subordinations and Collateral Releases
In response to the COVID-19 pandemic, the Small Business Administration (“SBA”) granted low-interest, long term Economic Injury Disaster Loans (“EIDL”) to millions of small businesses. While the pandemic no longer dominates news headlines and the EIDL program no longer issues new financing, 7(a) Lenders are often required to address these existing EIDL loans when lending ... Read More
Best Practices: Requirements for Commercial Real Estate Appraisals
https://starfieldsmith.com/wp-content/uploads/2024/02/dda41455-5d3a-4798-8186-41a6ce7f4b35.mp3 SBA’s guidance on real estate appraisals depends on the type, size and use of the SBA loan proceeds. This article focuses specifically on the basic commercial real estate appraisal requirements for Standard SBA 7(a) loans (meaning loans of more than $500,000) that are secured by commercial real estate. These requirements are set forth in ... Read More