Best Practices: Getting the SBA Fundamentals Right
SBA lenders are often overwhelmed by the myriad rules, regulations and guidelines associated with SBA lending. However, by focusing on a handful of core concepts, Lenders can develop the tools which, when applied consistently to their SBA operations, will help them to understand SBA requirements in various situations and circumstances, and which will lead them ... Read More
Best Practices: Seller Notes in Business Acquisitions
Under the Change of Ownership section of SOP 50 10 5(I), when the purchase price of a business includes intangible assets in excess of $500,000.00, the borrower and/or seller must provide an equity injection of 25% or more of the purchase price for the application to be processed under delegated authority. If seller is contributing ... Read More
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
