Best Practices: SBA Fine-tunes 504 Debt Refi Requirements
Among a handful of changes recently announced by the SBA to the 504 Debt Refinancing Program is one allowing a Borrower’s debt to be refinanced despite a recent change of ownership. By means of a Policy Notice issued late last year, the SBA adopted changes to the permanent 504 Debt Refinancing Program requested by the ... Read More
Best Practices: Importance of Ensuring a Borrower Avoids Bulk Sales and Successor Tax Liability in the Sale of Business Assets
Generally, the purchaser of a business is not liable for a seller’s unpaid taxes unless the purchaser agrees to assume them. However, most states have adopted laws that create a liability for a buyer who is purchasing more than half the assets of the business outside of the ordinary course of the selling entities’ business, ... Read More
Best Practices: Revised Franchise Procedures with the Release of SOP 50 10 5(I)
The Small Business Administration (“SBA”) has released SOP 50 10 5(I), which will take effect on January 1, 2017. One of the biggest changes in the new SOP relates to the SBA’s franchise procedures, which were modified to incorporate regulatory changes that were put in place on July 27, 2016. 13 CFR §121.301(f)(5) was revised ... Read More
Best Practices: New Bankruptcy Proof of Claim Forms and Revisiting Filing Requirements
New federal bankruptcy forms become effective today regarding proofs of claim. These new forms provide templates for the notice required once an objection to a proof of claim is filed. Most lenders will never need to produce one of these forms. But many lenders, unfortunately, will be on the receiving end of an objection to ... Read More
Best Practices: Avoiding Preferences in SBA Lending
Whether processing your SBA loan through general processing (“GP”) or through the Preferred Lenders Program (“PLP”), a lender must avoid establishing a preference. See 13 CFR §§120.411. This means that a lender must protect the SBA’s interest and must not put itself in a better position than the SBA. Pursuant to SOP 50 10 5(H), ... Read More
Best Practices: Civil Versus Criminal Liability for False Claims
At the August 2016 America East Conference for SBA Lenders, a general session was devoted to “Fraud Trends, Risk Factors and Tips on How to Avoid Becoming a Victim.” Part of this presentation was an overview of the federal False Claims Act, 31 U.S.C. §3729 et seq., and its application to the SBA lending process. ... Read More
