Best Practices: When Should Borrowers Engage Legal Counsel
Before, during and after the commitment phase on any loan, your client will undoubtedly have numerous questions about the process, costs, and time-frame for closing the loan. One common question is whether the borrower should engage an attorney to assist with the loan closing process. Ultimately, only your clients can decide whether they need an ... Read More
Best Practices: Understanding Cash Collateral in Bankruptcy
One of the most important bankruptcy concepts that a lender needs to understand is so-called “cash collateral.” The term cash collateral has a specific meaning in bankruptcy and there are Bankruptcy Code provisions that govern the parties’ respective rights in that collateral. Understanding what cash collateral is and how it is treated in bankruptcy can ... Read More
Best Practices: Having a Second Set of Eyes Review Your Loan Documents is Always A Good Idea
Nowadays we live in a fast-paced world where everyone wants everything done yesterday. There is no exception for lenders and their clients who want their loans closed as quickly as possible. In today’s world, we also have access to a whole host of products to assist us with meeting those tight deadlines. For lenders, there ... Read More
Best Practices: Getting Started with SBA Lending: SBA Express Loans
At a recent conference, I met several traditional lenders that expressed interest in SBA lending, but they did not know where to get started. A great place to start is the SBA Express Loan. SBA Express loans must meet SBA’s standard eligibility requirements as set forth in 13 CFR §§120.10 and explained in SOP 50 ... Read More
Best Practices: A Suggestion to Reduce Lender Responsibility for Borrower or Loan Agent Fraud
We have written in the past about the SBA Office of Inspector General’s activities in addressing fraud, waste and abuse in the SBA and the SBA’s loan programs. One of the criticisms of the SBA loan program is that because the lenders rely on the SBA loan guaranty for repayment upon default, lenders at times ... Read More
Best Practices: Trusts in SBA Lending
When a SBA lender comes across a small business applicant whose ownership interests or assets are owned by a Trust, the first question often asked is whether the Trust or Trustee need to be a borrower or a guarantor of the loan. The simple answer is that if the Trust benefits directly from the loan, ... Read More