Best Practices: What Do You Do When Your Real Estate Appraisal Comes in Low?
For SBA loans greater than $250,000 and collateralized by commercial real estate, SOP 50 10 5(J), Subpart B, Chapter 4, Section IV, Paragraph A requires that lenders obtain a real estate appraisal by an independent, state-licensed or state-certified appraiser. If the commercial real estate has an estimated value greater than $1,000,000, then lenders must use ... Read More
Best Practices: Loan Maturities for Real Estate Construction and Leasehold Improvement Loans
What is the maximum maturity for a real estate loan with construction or renovation? How about a leasehold improvement loan? May a lender amortize an interest only period that is not required to complete significant construction or renovation? This article is intended to address these questions and provide guidance as to the treatment of an ... Read More
Best Practices: Lending Oversight Reform Act of 2018
On June 21, 2018, the President signed into law the Small Business 7(a) Lending Oversight Reform Act of 2018 (Public Law No: 115-189, the “Reform Act”). The Reform Act, which received bipartisan support, strengthens the Small Business Administration’s lending program in several ways. First, it provides a statutory basis for the responsibility of the SBA’s ... Read More
Best Practices: Perfecting Liens on Non-Real Estate Collateral
One of the top reasons for a repair of an SBA guaranty is failure to obtain the required lien position on business assets. This closing error is easily avoided if the lender has systems in place to ensure that UCCs are filed properly and timely without any intervening liens. Below is a primer on the ... Read More
Best Practices: Changes to the SBA Servicing and Liquidation Matrix: Version 14
The SBA recently issued version 14 of its revised servicing and liquidation matrix which became effective on May 1, 2018. There are a few changes that all lenders need to be aware of in order to properly service and liquidate their SBA loans. The matrix continues to be a great guide for lenders to consult ... Read More
Best Practices: Avoiding Lender Liability Claims
Lenders participating in the U.S. Small Business Administration lending programs often encounter borrowers who are unrepresented by legal counsel for the loan transaction. As a result, borrowers try to rely on the loan closer, business development officer, and frequently lender’s closing counsel for guidance on due diligence items such as the EPC/OC lease, compliance with ... Read More
