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
Best Practices: PPP Loan Program – Business Sales – Preliminary Considerations Part 1 of 2
When an Original Borrower has received a Paycheck Protection Program (“PPP”) Loan and, prior to loan forgiveness, wishes to transfer ownership to a new purchaser, lenders often find themselves uncertain as to how to proceed. With no official guidance yet from SBA, may lenders proceed in a prudent manner by keeping program goals in mind, ... Read More
Best Practices: Failure to Request 1112 Payments Could Jeopardize Your Guarantee
On July 28, 2020 SBA issued Procedural Notice 5000-20041 (“PN 20041”) which provides additional guidance to Lenders on implementation of Section 1112 of the CARES Act. Section 1112 provides a subsidy for 6 months’ worth of payments for every SBA 7(a) and 504 loan in its portfolio, as well as every new loan originated and fully ... Read More
Best Practices: What Should You Do With Your PPP Loans?
This year has brought a lot of uncertainty and SBA lending is no exception. The Paycheck Protection Program (“PPP”) expired on August 8th, and the SBA’s loan forgiveness portal opened up on August 10th, and yet Lenders continue to wait and wonder what will happen with PPP and forgiveness as Congress debates another economic stimulus ... Read More
Best Practices: Lenders Need to Work Closely with CDCs to Avoid 504 Loan Approval Delays
Third Party Lenders participating in the SBA’s 504 Loan Program should become familiar with new, specific matters that must be included in a CDC’s financial analysis of the borrower and documented in the CDC’s credit memorandum, for all loans made during the COVID-19 emergency through at least December 31, 2020. In SBA Procedural Notice 5000-20040, ... Read More