Best Practices: The Cost of Litigation
What exactly is the “cost of litigation,” and what impact will litigation have on a borrower’s ability to meet its loan repayment obligations? There are the “out-of-pocket” costs of litigation which can be quite substantial: legal fees and costs; court fees and costs; receivership costs and fees; discovery costs including expert witness fees and costs, ... Read More
Best Practices: Additional PPP Guidance on Applicants and Owners “Presently” in Bankruptcy
Since the rollout of the PPP loan program in March 2020, the first question on the PPP Application asks: “Is the Applicant or any owner of the Applicant presently suspended, debarred, proposed for debarment, declared ineligible, voluntarily excluded from participation in this transaction by any Federal department or agency, or presently involved in any bankruptcy?” ... Read More
Best Practices: The SBA Restaurant Revitalization Fund
Arguably one of the hardest hit industries in the United States during the COVID-19 pandemic has been the restaurant industry. Restaurants, bars, caterers, and even food trucks and food stands have felt the crippling effect of the pandemic, and the SBA is rolling out a program called the Restaurant Revitalization Fund (RRF) that is aimed ... Read More
Best Practices: Lender’s Obligation to Pay Florida Documentary Stamp Tax
To be certain, Florida documentary stamp tax is a vast and complicated topic worthy of a book. In this article, however, I would like to direct your attention specifically to the lender’s obligation to pay this tax directly to the Florida Department of Revenue in certain circumstances and the method through which that payment is ... Read More
Best Practices: Lender Due Diligence Crucial to Identification of Covid-19-Related Financial Crimes
SBA’s Office of Inspector General (SBA-OIG) advises that financial institutions (FI) continue to serve an important role in uncovering and identifying thousands of fraudulent PPP (Paycheck Protection Program) loans and EIDL (Economic Injury Disaster Loans). FI serve as the “Receiving Depository Financial Institution (RDFI)” for PPP program funds from a third-party FI (the PPP lender), ... Read More
Best Practices: SBA Form 159 Submission Changes
The SBA recently announced changes to the submission procedure for SBA Form 159 Fee Disclosure Form and Compensation Agreement (“Form 159”). Lenders are required to submit Form 159 when a third party agent is paid by the SBA applicant or the SBA Lender in connection with an SBA loan application. There are no substantive changes ... Read More