Best Practices: PPP Lender Portal FAQ Changes: Use of Setoff Rights
On March 3, 2022, through its PPP Lender Platform, SBA provided informal guidance to lenders on several issues, including whether lenders “should” consider offset as a remedy for borrowers who default on the repayment of PPP loans when they were unable to seek forgiveness. It is important to note that the guidance states that while ... Read More
Best Practices: SBA’s Announcement for New EIDL Deferments Means 7(a) Lenders Must Continue to Address Assignment and Subordination Questions
In response to COVID-19, the Small Business Administration (“SBA”) was given the authority to make low-interest fixed-rate long-term COVID-19 Economic Injury Disaster Loans (“EIDL”) to help small businesses and other entities overcome the effects of the pandemic by providing borrowers with working capital to meet ordinary and necessary operating expenses. In order to further assist ... Read More
Best Practices: ESOP Transactions Under SOP 50 10 6
An employee stock ownership plan (“ESOP”) is a type of employee benefit plan in which company stock is acquired by, and held in accounts for, the employees of the company. More and more companies are taking advantage of this structure because ESOPs provide a vehicle for employees to obtain an ownership interest in their employer, ... Read More
Best Practices: Revisions to SBA’s Financial Information Verification Procedures
Effective March 9, 2022, SBA set forth revised procedures for SBA lenders and Certified Development Companies (CDCs) concerning the verification of financial information for the small business applicant. See SBA Procedural Notice 5000-829416 (Notice). The change in policy comes in response to the challenges lenders and CDCs have encountered with the existing verification process, including ... Read More
Best Practices: SBA Responses to PPP FAQs
The SBA recently responded and provided guidance on its Paycheck Protection Program Platform site to several of the frequently asked questions that Lenders have related to SBA PPP loans. While we recommend reading the entire Q & A at: (SBA_PPP_Platform_Update.pdf (ymaws.com)), below is a summary of the responses to the questions that Starfield & Smith ... Read More
Best Practices: Recent SBA Procedural Notices for SBA Lenders
Recently SBA has issued two procedural notices related to PPP and certain 7(a) loans approved under the CARES Act, as amended by Section 325 of the Economic Aid Act, and the Second Round Section 1112 Payments that are authorized for the 7(a), 504, and Microloan Programs. Partial Loan Forgiveness SBA Reviews Procedural Notice 5000-827666 issued ... Read More
