Best Practices: Express Loan Credit Underwriting Requirements
Section 4 on page 180 of SOP 50 10 5(J) confirms that SBA Express lenders have authority to make credit decisions for Express loans without prior SBA review. This authority can allow the lender to process such loan applications quicker than general 7(a) loans, but also opens the lender up to a more thorough review ... Read More
Best Practices: Documenting Equity Injection from Affiliates in 7(a) Loans
Recently, we have been asked if equity injection from an applicant’s corporate affiliate can come in the form of a gift. The short answer is no. In addition to income and gift tax implications beyond the scope of this article, getting cash out of a corporation rarely takes the form of a gift, unless it ... Read More
Best Practices: Florida’s Fictitious Name Act: A discussion About Fictitious Names
While the following article is based upon the requirements of Florida’s Fictitious Name Act (see Florida Statutes §865.09), most states have their own fictitious name acts which have similar requirements. Therefore, this article is meant to be a general discussion as to what is a fictitious name, the reasons for filing a fictitious name, the ... Read More
Best Practices: SOP Refinance Rules
Under certain circumstances, SBA guaranteed loans may be used to refinance existing debt. Such debt may be in the form of short or long term debt structured with a demand note or balloon payment, debt with an interest rate that exceeds the SBA maximum rate (based on size, term, and 7(a) processing method), credit card ... Read More
Best Practices: Deposit Accounts as Collateral – What happens if the account is garnished by a judgment creditor?
It is not uncommon for a lender to take a security interest in a deposit account of a borrower as security for a loan. Normally, the lender will maintain the deposit account at their bank and permit the borrower to utilize the account so long as the borrower is not in default under the lender’s ... Read More
Best Practices: Reviewing Management Agreements under SOP 50 10 5(J)
All SBA loan applicants and their affiliates must be small, when aggregated together, under SBA size requirements to participate in SBA’s lending programs. In determining whether affiliation exists, SBA analyzes an applicant’s ownership, management, and franchise, license or other agreements and relationships at the time of application. One type of affiliation may arise where a ... Read More
