Best Practices: Revised Franchise Procedures with the Release of SOP 50 10 5(I)
The Small Business Administration (“SBA”) has released SOP 50 10 5(I), which will take effect on January 1, 2017. One of the biggest changes in the new SOP relates to the SBA’s franchise procedures, which were modified to incorporate regulatory changes that were put in place on July 27, 2016. 13 CFR §121.301(f)(5) was revised ... Read More
Best Practices: New Bankruptcy Proof of Claim Forms and Revisiting Filing Requirements
New federal bankruptcy forms become effective today regarding proofs of claim. These new forms provide templates for the notice required once an objection to a proof of claim is filed. Most lenders will never need to produce one of these forms. But many lenders, unfortunately, will be on the receiving end of an objection to ... Read More
Best Practices: Avoiding Preferences in SBA Lending
Whether processing your SBA loan through general processing (“GP”) or through the Preferred Lenders Program (“PLP”), a lender must avoid establishing a preference. See 13 CFR §§120.411. This means that a lender must protect the SBA’s interest and must not put itself in a better position than the SBA. Pursuant to SOP 50 10 5(H), ... Read More
Best Practices: Civil Versus Criminal Liability for False Claims
At the August 2016 America East Conference for SBA Lenders, a general session was devoted to “Fraud Trends, Risk Factors and Tips on How to Avoid Becoming a Victim.” Part of this presentation was an overview of the federal False Claims Act, 31 U.S.C. §3729 et seq., and its application to the SBA lending process. ... Read More
Best Practices: Commercial Real Estate Appraisals for SBA 7A Loans and Non Arm’s Length Transactions
This article will summarize commercial real estate appraisal requirements for SBA 7a loans, and specifically discuss the requirement applicable to a business real estate appraisal when there is a change of ownership within the 36 months prior to the date of the loan application for the related real estate purchase. One of the primary underwriting ... Read More
Best Practices: A Refresher on Liquidation Requirements for Submitting Litigation Plans to SBA
One of the benefits of the SBA Loan program, along with the government guaranteed portion of the loan, is that there are other expenses that the SBA will participate in, that a Lender would typically be expected to pay itself in a conventional loan in order to recover and liquidate its collateral and pursue any ... Read More