Best Practices: Looking For a Job? Proposed Changes to Job Creation and Retention Regulations in The 504 Lending Program
The Small Business Administration (“SBA”) created the Development Company Loan Program (504 Loan Program) to foster economic development and create or retain job opportunities by providing long-term financing for small businesses. To qualify for financing under the 504 Loan Program, each 504 Project must satisfy one of the economic development objectives or public policy goals ... Read More
Best Practices: Landlord’s Agreements – Waiver or Subordination?
A large number of business owners who seek financing under the SBA 7(a) Loan Program operate from leased locations, be it stand-alone buildings, shopping centers or commercial office parks. In these transactions, underwritten on a cash-flow basis, the collateral typically consists of tangible, business personal property located on leased premises such as equipment, furniture, trade ... Read More
Best Practices: Lender Liability for Failure to Satisfy a Mortgage
Most state statutes require that any lender who receives full payment of all sums due on a mortgage must satisfy said mortgage following a formal request from the borrower. Recently, there has been an alarming trend amongst even the most sophisticated lenders – said trend pertains to the failure of lenders to timely satisfy or ... Read More
Best Practices: Diligence In Collecting Financials Can Save A Lender Headaches Down The Road
Once a loan has closed, it moves into the lender’s portfolio to be serviced in accordance with that lender’s policies. That servicing continues until the loan is paid in full or until the loan defaults and ends up in a lender’s workout department. Typically, loan documents for commercial loans, including SBA loans, require a borrower ... Read More
Best Practices: Taking the Guesswork Out of Religious Eligibility Determinations
Pursuant to the First Amendment, “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof. . .” (U.S. Const. Amend I). The First Amendment prohibits Congress from favoring one religion over another. Accordingly, an SBA lender cannot make a loan to a Small Business Applicant that is “principally engaged ... Read More
Best Practices: The Survey Exception
The U.S. Small Business Administration (“SBA”) National 7(a) Authorization Boilerplate Version 2018 (“Boilerplate”) indicates SBA lenders must obtain a lien on 100% of the interest in the Borrower’s collateral and properly perfect all lien positions as stated in the SBA Loan Authorization. With respect to real estate collateral, Appendix B of the Boilerplate identifies eight ... Read More
