Best Practices : Why Lenders Should Consider Buying Back SBA Loans From The Secondary Market
For those lenders who sell a portion of their SBA guaranteed loans on the secondary market, they may choose to repurchase the loans or require the SBA to purchase. In the later case, the lenders benefit by not needing to extend cash immediately. However, for the reasons set forth, we recommend that, when feasible, lenders ... Read More
Best Practices: “Other” Business Insurance
Lenders participating in SBA lending programs are required to obtain evidence of hazard insurance, including flood insurance, if applicable, on any real or personal property collateral securing its loans. Most lenders also obtain evidence of general liability insurance and worker’s compensation insurance as a matter of prudent lending. Every small business is unique and there ... Read More
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