Financing change of ownership transactions can present several unique challenges for lenders that are not part of loans for refinances or startups. From determining what searches are required to ensure the proper lien position, to dealing with the challenges posed by parties to the transaction whose timelines and expectations rarely align with those of the ... Read More

Under Subpart B, Chapter 4, Section II of SOP 50 10 5(H), a lender must use commercially reasonable and prudent practices and procedures to identify property which may be collateral for its 7(a) loan, which practices and procedures are at least as thorough as those used by the lender for similarly-sized non-SBA guaranteed commercial loans ... Read More

The SBA imposes occupancy requirements when loan proceeds include the purchase of an existing building or for new construction. These requirements are designed to ensure that the borrowing entity’s business is successful and that the loan proceeds benefit the borrower, rather than a third party. Accordingly, lenders must perform an analysis of the percentage of ... Read More

Most SBA lenders are aware of the rule that they cannot request that the SBA purchase a loan guaranty until the loan has become at least 60 days past due. 13 CFR §120.520. However, a difficult question can arise for lenders when a borrower has defaulted under the note, but continues to stay current on ... Read More

Documenting disbursements can be a monumental task for SBA lenders on construction loans. SBA cites failure to use loan proceeds as required by the SBA loan authorization as one of the most common lender deficiencies noted in PLP audits and guaranty purchase reviews. Construction loans present a multitude of pre-closing and post-closing challenges for lenders ... Read More

Late last year, the American Land Title Association (ALTA) and the National Society of Professional Surveyors (NSPS), successor to the American Congress of Surveying and Mapping (ACSM), adopted new Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys. The new standards went into effect February 23, 2016. There are some fairly substantial changes that deserve ... Read More