Best Practices: Existing Third Party Tenants and EPC/OC Leases
Generally, SBA loans are made to operating businesses. An exception are loans made to Eligible Passive Companies (“EPCs”), those that use loan proceeds to acquire, and/or improve or renovate real or personal property (“Project Property”) leased to one or more Operating Companies (“OCs”) for conducting the OC’s business. (13 CFR 120.111). The EPC/OC rule, which ... Read More
Best Practices: Keeping Your Employees Current On SBA Requirements
A successful SBA lender will insure that its employees who deal with SBA loans, whether daily or just occasionally, are well trained in SBA requirements, processes, and procedures. Knowing where to turn for training and how to find relevant information is key to staying in good standing with SBA and protecting SBA loan guarantees. Training ... Read More
Best Practices: Basics of SBA Lender Oversight
SBA lenders have a responsibility to ensure that they maintain the integrity of the SBA loan programs throughout their institutions. 13 CFR §120.140(f) prohibits SBA lenders from engaging “in conduct reflecting a lack of business integrity or honesty”; and the SBA monitors the lending practices of its participant lenders to assure compliance. The SBA’s Office ... Read More
Best Practices: SBA Provides Disaster Relief to Small Businesses
In the wake of the catastrophic devastation caused by hurricanes Harvey and Irma, the SBA has coordinated with FEMA to provide disaster assistance to small businesses in affected areas. Under the “Disaster Loan Program” eligible borrowers may be able to obtain a low interest fixed-rate loan to rebuild their businesses. Under the deferment program, borrowers ... Read More
Best Practices: SBA Tweaks the EPC/OC Rule
Following an extensive review and consideration of public comments, the SBA stands poised to put into effect regulatory changes to the Eligible Passive Rule (“EPC/OC Rule”). Set to become effective on September 20, 2017, after the expiration of the additional, mandatory 30 day period after initial publication, the revisions impact three core principles of the ... Read More
Best Practices: Collateral Changes to SBA Loans
So you’ve closed your SBA loan, hopefully in accordance with all SOP requirements, and now you have moved your loan to servicing. It is not uncommon to have borrowers make various servicing requests throughout the life of the loan including substituting, modifying or releasing collateral. What is a Lender to do about these requests? The ... Read More