Best Practices: When Between a Rock and a Hard Place, Facts Matter!
Most SBA lenders are aware of the rule that they cannot request that the SBA purchase a loan guaranty until the loan has become at least 60 days past due. 13 CFR §120.520. However, a difficult question can arise for lenders when a borrower has defaulted under the note, but continues to stay current on ... Read More
Best Practices: Documenting Disbursements: Construction Loans
Documenting disbursements can be a monumental task for SBA lenders on construction loans. SBA cites failure to use loan proceeds as required by the SBA loan authorization as one of the most common lender deficiencies noted in PLP audits and guaranty purchase reviews. Construction loans present a multitude of pre-closing and post-closing challenges for lenders ... Read More
Best Practices: New Minimum Standard Requirements for ALTA Surveys
Late last year, the American Land Title Association (ALTA) and the National Society of Professional Surveyors (NSPS), successor to the American Congress of Surveying and Mapping (ACSM), adopted new Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys. The new standards went into effect February 23, 2016. There are some fairly substantial changes that deserve ... Read More
Best Practices: Getting the SBA Fundamentals Right #2
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: Make NO Mistake – Circuit Courts Rule Against Lenders for Minor Errors in Security Documents
When financing a government guaranteed loan through the Small Business Administration (“SBA”) 7(a) program, lenders must not only identify all collateral required by the SOP 50 10 but also obtain a valid and enforceable security interest in that collateral pursuant to Article 9 of the Uniform Commercial Code (the “UCC”). In order to comply with ... Read More
Best Practices: Use Loan Proceeds to Refinance Existing Debt
When SBA lenders use loan proceeds to refinance existing debt, there are various requirements that must be met for the loan to be eligible. SOP 50 10 5 (H), Subpart B, Chapter 2, Paragraph IV. E sets forth these requirements. Not only is it imperative to make sure the debt being refinanced is eligible for ... Read More