Best Practices: Requirements and Uses of SBA Loans
https://starfieldsmith.com/wp-content/uploads/2024/04/e2cf4699-6a84-4c93-9fea-a5196c4c68b3.mp3 The U.S. Small Business Administration’s 504 Loan Program was created to foster economic development and create or retain job opportunities and stimulate growth, expansion, and modernization of small businesses by providing long-term financing of fixed assets for small businesses. 504 Projects are accomplished through the partnership between the Third Party Lender who provides 50% ... Read More
Best Practices: Enforcement of Judgments on SBA Loans
https://starfieldsmith.com/wp-content/uploads/2024/04/aae9a6f3-27b9-4911-9a64-766a5b8b5cac.mp3 The U.S. Small Business Administration addresses its policies on enforcement of judgments in Chapter 22 of the SOP 50 57 3 (the “SOP”), which is titled Litigation. In that chapter, there is a section specifically addressing what actions lenders should take if they have chosen to obtain a judgment against any obligor on an ... Read More
Best Practice: SBA Requirements for IRS Tax Transcripts
https://starfieldsmith.com/wp-content/uploads/2024/03/dc19ead2-4856-4fb9-93e0-80423b7a0f94.mp3 A crucial step of underwriting and closing an SBA loan is verification of the SBA applicant’s financial information and tax returns. SOP 50 10 7.1 sets forth specific tax verification guidance and requirements at pages 72-74. Read on to find out the who, what, when, why and how. What is the purpose of SBA’s ... Read More
Best Practices: ESOPs Under SOP 50 10 7.1
https://starfieldsmith.com/wp-content/uploads/2024/03/5f8373d7-1875-4dc1-8f62-2eaaa40b78f8-1.mp3 SOP 50 10 7.1 has modified requirements on ESOP lending and made it easier for lenders to provide financing to ESOPs and/or financing resulting in the ESOP purchasing a controlling interest (at least 51 percent) in the employer small business. An employee stock ownership plan (“ESOP”) is a type of employee benefit plan in ... Read More
Best Practices: Requirements for the Universal Purchase Package
https://starfieldsmith.com/wp-content/uploads/2024/03/a4d5ccff-6481-4ca4-9c2f-563d821d03cd.mp3 On August 1, 2023, the SBA unveiled its new streamlined Guaranty Purchase package. The new Universal Purchase Package (UPP) now takes the place of the former SBA 10 Tab Package. There are now 8 Tabs, instead of the previous “10 Tabs” that Lenders were required to submit. While the guaranty purchase package has changed, ... Read More
Best Practices: Bridging the Gap with Interim Advances
https://starfieldsmith.com/wp-content/uploads/2024/03/6ad559dc-fa28-4dfb-b6aa-24f346565790.mp3 Since the SBA 7a program is designed to expand access to capital for small businesses who cannot obtain credit elsewhere, lenders must ensure that all diligence items have been cleared before moving forward with closing. As such, it is generally understood that a closing for an SBA 7a loan can take some time due ... Read More
