Best Practices: What to Do if Your Guarantor’s Primary Residential Mortgage is on Deferment
In the midst of the pandemic, lenders are finding that some common collateral structures are presenting new challenges when it comes to Small Business Administration (“SBA”) due diligence requirements and credit underwriting. One such scenario is when a lender requires residential real estate to be pledged as secondary collateral. For certain 7(a) loans, the SBA ... Read More
Best Practices: PPP Forgiveness Applications – Vendors, Lender Assistance and Fees
Because SBA was ordered to disclose the identities of millions of business owners who took Paycheck Protection Program (“PPP”) loans during the pandemic (after having previously disclosed loan data concerning borrowers that received $150,000 or more), an unintended consequence of the disclosure has been a proliferation of vendors who have contacted PPP borrowers. These “vendors” ... Read More
Best Practices: Closing Real Estate Loans: Escrow Closing vs. Table Closing
When financing an acquisition of real estate, the closing process will vary based on whether the transaction is consummated by way of a “table” closing or an “escrow” closing. Both closing methods are geographically tailored with the east-coast states typically following the table closing format, and the west-coast states utilizing the escrow closing procedure. The ... Read More
Best Practices: Recently Updated SBA Form 1919 Highlights Agency’s Continued Focus on 401(k) Plans
Effective November 3, 2020, the U.S. Small Business Administration (SBA) announced the update and release of SBA Form 1919, Borrower Information Form. SBA Information Notice 5000-20059. Among other things, the new Borrower Information Form highlights the SBA’s continued focus on businesses owned in whole or in part by a 401(k) plan (including Rollovers as Business ... Read More
Best Practices: PPP Loan Review Process
Under the CARES Act, SBA has the authority to conduct a review of any loan originated under the Paycheck Protection Program (“PPP”) at its discretion at any time. SBA may review a PPP loan for (i) Borrower eligibility, (ii) PPP loan amounts and use of proceeds and (iii) PPP loan forgiveness amounts (“Loan Review”). SBA ... Read More
Best Practices: PPP Loan Necessity Questionnaire
At the end of October, lenders who had submitted PPP loan forgiveness applications for a company that, together with its affiliates, received $2,000,000 or more in PPP financing began receiving a response from the U.S. Small Business Administration (“SBA”) requiring the completion of a new Loan Necessity Questionnaire by the PPP borrower and submission of ... Read More
