Best Practices: SBA Offers In Compromise
With the current uptick in SBA loan defaults, lenders should ensure that their loan servicing teams familiarize themselves with the SBA’s offer in compromise (“OIC”) process. A lender may not settle a borrower or any guarantor’s liability on a defaulted SBA loan without SBA approval. All settlement requests made by borrowers or guarantors to settle ... Read More
Best Practices: Due Diligence in 7(a) Loans secured by Commercial Real Estate: Surveys
Borrowers undertaking a U.S. Small Business Administration (“SBA”) 7(a) loan often ask lenders whether a new survey will be required to close. This is a complex question and often, the answer will not be available until, at a minimum, the title insurance commitment is prepared by the title agent. Types of Loan Policies and the ... Read More
Best Practices: Evaluating the Risk of Real Estate Encroachments
When U.S. Small Business Administration (“SBA”) loan proceeds are used to finance the acquisition of commercial real estate, a title policy is obtained to protect the interests of the bank and the borrower. During the loan due diligence phase, the bank must thoroughly review exceptions that appear on the title commitment and survey, if available, ... Read More
SBA’s Vendor/Technology Selection Requirements for Lenders Utilizing Electronic Signatures
A growing number of SBA lenders are utilizing electronic signatures on their SBA forms and documents, including loan documents, which require a signature. SBA lenders must be mindful of the strict requirements placed by the SBA on the technology utilized to obtain electronic signatures. SBA lenders who fail to adhere to the standards prescribed by ... Read More
Best Practices: SBA Requirements for Historic Registry Properties
Section 106 of the National Historic Preservation Act requires Federal agencies to consider whether their federally-funded projects directly or indirectly adversely impact properties and sites that are listed or eligible to be listed on the National Register of Historic Places (“NRHP”) (54 U.S.C. § 300101 et seq.; 36 CFR §§ 60.1 et seq. and 800.1 ... Read More
Best Practices: Common Insurance Errors and Their Impact on the SBA Guaranty
Insurance requirements are different for every loan and are based on the type of collateral being taken, the type of business that is borrowing funds and the project for which such funds are being utilized. Two types of business insurance are required for almost every loan: hazard insurance and liability insurance. Lenders must follow SBA ... Read More
