Best Practices: Certifying Records Requested in a PPP Loan Investigation
Considering the billions of dollars in PPP loans that Lenders made without being able to employ its customary underwriting and due diligence procedures, it is not surprising that investigations are popping up all over the place into possible fraud and abuse by borrowers. Because the SBA has been designated to administer the PPP loan program, ... Read More
Best Practices: Servicing and Liquidating PPP Loans
Lenders face uncharted territory when servicing and liquidating (“S&L”) Paycheck Protection Program (“PPP”) loans. This article explains the unique challenges lenders face with these unsecured facilities, and offers suggestions until SBA offers formal guidance geared to PPP S&L issues. The CARES Act’s PPP was designed by Congress to preserve employment by providing capital to ... Read More
Best Practices: Last Call for Section 1112 Closings
Lenders and borrowers only have a few days left to take advantage of the subsidy loan payments provided by Section 1112 of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The CARES Act acknowledged that all borrowers were adversely affected by COVID-19 and provided relief to borrowers in the form of loan ... Read More
Best Practices: Non-Compete Agreements: When Does an SBA Lender Need One?
When a Buyer is considering acquiring a new business, both the Purchaser and Lender should consider whether the Seller or any of its key employees could pose a threat to the newly acquired enterprise. In order to protect the new venture, a non-compete agreement may be a useful tool to help ensure the new business’ ... Read More
Best Practices: Change is Coming: A Brief Summary of the SOP 50 10 6
On August 28th the Small Business Administration (“SBA”) released the SOP 50 10 6, which seeks to modernize and streamline the SBA’s rules and policies for 7(a) and 504 loans. To accomplish this, the SBA incorporated new navigation features, including bookmarks, built-in style headings, and a navigation pane. In addition, there are five new appendices, ... Read More
Best Practices: PPP Loan Program – Financing Business Acquisitions Lender Considerations Part 2 of 2
As discussed in last week’s article, many uncertainties exist when the owners of a business who received a Paycheck Protection Program (“PPP”) loan wish to transfer their business to a purchaser. Without formal guidance from SBA, these “changes in ownership” transactions pose unprecedented challenges for 7(a) lenders. This week, we will examine some key considerations ... Read More
