Following an extensive review and consideration of public comments, the SBA stands poised to put into effect regulatory changes to the Eligible Passive Rule (“EPC/OC Rule”). Set to become effective on September 20, 2017, after the expiration of the additional, mandatory 30 day period after initial publication, the revisions impact three core principles of the ... Read More

So you’ve closed your SBA loan, hopefully in accordance with all SOP requirements, and now you have moved your loan to servicing. It is not uncommon to have borrowers make various servicing requests throughout the life of the loan including substituting, modifying or releasing collateral. What is a Lender to do about these requests? The ... Read More

When a Borrower wishes to use funds from a 401(k) plan (the “Plan”) as equity injection on SBA loans, lenders must make sure they are properly documenting the injection and that the loan structure remains compliant with SBA rules and regulations. See SOP 50 10 5(I), pages 157 and 158. SBA requires that all individuals ... Read More

The SBA’s credit elsewhere test underpins the 7(a) loan program. Accordingly, failure to comply with the SBA’s credit elsewhere requirements may subject a lender to a denial of the SBA guaranty as well as a possible enforcement action by the Office of Credit Risk Management. To comply with the SBA’s credit elsewhere requirements, which appear ... Read More

It turns out that your English teacher may have been right, after all: a misplaced comma can be a big deal. A Maine dairy company was reminded of the importance of grammar in a recent court decision, that could cost the dairy company an estimated $10 million. In 2014, three truck drivers sued Oakhurst Dairy ... Read More

SBA guaranteed loan proceeds may be used to construct or renovate buildings. The SBA provides specific requirements for SBA guaranteed loans where the construction component of the loan is more than $350,000. For small construction projects where the construction component of the loan is less than $350,000, the SBA has more relaxed requirements. However, even ... Read More