Best Practices: Making Sure Your Credit Memos are Audit Ready
While a credit memorandum may primarily be a way for lenders to memorialize their own underwriting of a loan, it is important to keep in mind that this document is one of the primary documents that SBA reviews to ensure that a lender is in compliance with SBA 7(a) regulations. SBA’s compliance audits of loan ... Read More
Best Practices: SBA 7(a) Loan Closings and Disbursements During COVID-19 Economic Times
Although businesses across the country have been affected by the COVID-19 pandemic, many lenders have recently shifted focus from making PPP loans to again making SBA 7(a) loans. Many lenders are financing construction projects, start-up businesses, real estate purchases and business acquisitions, but lenders should be mindful of adverse change considerations when extending these loans ... Read More
Best Practices: Increasing Loan Defaults require Prudent SBA Lenders to Pivot Staffing from PPP to Monitoring of their 7(a) loan portfolios
With no end in sight to the COVID-19 pandemic, SBA lenders would be wise to address the rapidly rising number of small business loan failures. While the SBA has been providing Section 1112 debt relief since April, these payments are scheduled to end in late September, forcing lenders to examine stressed loan portfolios. It is ... Read More
Best Practices: Overview of the Main Street Lending Program
While most small business borrowers impacted by the COVID-19 pandemic have been solely focused on financial assistance from lenders participating in the Paycheck Protection Program, established under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), another lending program aimed at assisting small and medium size businesses is getting off the ground. The Federal ... Read More
Best Practices: Timing of Application for Forgiveness of PPP Loan
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), was signed into law, and the Paycheck Protection Program (“PPP”) was included as part of that legislation. Subsequently, on June 5, 2020, the Paycheck Protection Program Flexibility Act of 2020 (the “Flexibility Act”), was signed into law. The Flexibility Act modifies ... Read More
Best Practices: Using An Internal Investigation To Your Advantage
As in any industry that is subject to government oversight and regulation, participants in SBA loan guaranty programs are subject to higher levels of scrutiny than most businesses. The consequences that may arise from internal wrongdoing are different from those found in unregulated industries. In the SBA world, the concept of program integrity is all ... Read More