Best Practices: Trusts in SBA Lending
When a SBA lender comes across a small business applicant whose ownership interests or assets are owned by a Trust, the first question often asked is whether the Trust or Trustee need to be a borrower or a guarantor of the loan. The simple answer is that if the Trust benefits directly from the loan, ... Read More
Best Practices: Flood Insurance Requirements under 50 10 5 (H)
As we’ve seen over and over the last few years, communities across the United States have been devastated by storms and resulting floods that have destroyed homes and businesses alike. Undoubtedly, some of those businesses begun or were sustained with SBA loans. Therefore, it is crucial for SBA Lenders to understand Flood Insurance and, when ... Read More
Best Practices: What Lenders Need To Know About Lender Service Providers
According to 13 CFR §103.1(d)), a Lender Service Provider is “an Agent who carries out lender functions in originating, disbursing, servicing, or liquidating a specific SBA business loan or loan portfolio for compensation from the lender.” Following is some useful information about the use of a Lender Service Provider (“LSP”) that lenders should be aware ... Read More
SBA’s Final Rule: Changes to Affiliation Regulations
On June 27, 2016, SBA issued a Final Rule on regulations related to affiliation analysis. This rule will be effective as of July 27, 2016. As was true for the prior rule, the final rule frames affiliation in terms of control. It provides that “concerns and entities are affiliates of each other when one controls ... Read More
Best Practices: Permanent 504 Refinancing Program
The long awaited 504 Debt Refinancing Program launched on June 24, 2016, after expiration of the comment period for the interim final rule published in the Federal Register on May 25, 2016. The interim final rule implements sections of the Consolidated Appropriations Act of 2016, which authorized SBA financed projects to include the refinancing of ... Read More
Best Practices: Dealing With Those Damned Discovery Subpoenas
It’s bad enough having to be subjected to the seemingly ridiculous discovery obligations when your company is involved in a lawsuit, but having to provide documents and/or testimony in lawsuits where you are not even a party is even more aggravating. Financial institutions are repositories for lots of sensitive and potentially embarrassing information regarding its ... Read More
