Best Practices: Litigation and Recoverable Expenses
Following a default, Lenders often contend with questions related to whether to file suits against obligors; the need for litigation plans; when to advance expenses; and, what costs can be reimbursed by SBA. Ultimately, most decisions made on these questions are determined following a cost/benefit analysis. Chapters 22 and 23 of the SOP 50 57 ... Read More
Best Practices: Lease Requirements Under SOP 50 10 7.1 and The Waiver Process
https://starfieldsmith.com/wp-content/uploads/2023/12/7ea221b6-14b1-41d2-bad1-348f5255f7bb.mp3 In recent months, the SBA lending community has seen SBA’s lease requirements go through a series of changes, but we may end up close to where we started. Historically, as a general rule of thumb, SBA lenders have required a borrower that is leasing space to obtain a lease with a term equal to ... Read More
Best Practices: The Basics of Acquired Collateral Under SOP 50 57 3
https://starfieldsmith.com/wp-content/uploads/2023/11/27d92ffa-ac78-4ecf-b683-fb6d5e94d19a.mp3 With rising interest rates, many lenders are experiencing a rise in defaults and liquidations. Sometimes, liquidations result in the lender having to acquire title to real property or personal property. SOP 50 57 3, Chapter 20 requires that Lenders liquidate real property and personal property in a manner that will maximize recovery in the ... Read More
Best Practices: SBA Workouts under the 50 57 3
https://starfieldsmith.com/wp-content/uploads/2023/11/9e05fd24-c703-4f6b-9dbc-c7f8aabeb23a.mp3 As interest rates have risen, so has the possibility that borrowers will no longer be able to make regularly scheduled loan payments. In the 50 57 3 Loan Servicing and Liquidation SOP (“SOP”), the SBA requires the Lender to make a good faith effort when feasible to negotiate a workout on a Loan that ... Read More
Best Practices: Site Visits and Liquidation Plans Under the 50 57 3
https://starfieldsmith.com/wp-content/uploads/2023/10/f7d98361-5cae-4c1f-8f1e-6fc2c197298c.mp3 Following a default, lenders must perform a timely site visit in order to inspect collateral, determine its recoverable value and develop a liquidation strategy. SBA requires the site visit to be completed within 60 days of a payment default or 15 days of a non-payment default event. Prior to the site visit, lenders should ... Read More
Best Practices: Loan Maturities Under SOP 50 10 7.1
https://starfieldsmith.com/wp-content/uploads/2023/11/3f504171-8e26-4d7e-97eb-8aba1b57befb.mp3 With the U.S. Small Business Administration’s (“SBA”) release of SOP 50 10 7.1, Lenders should be pleased to see the return of some familiar provisions that were in effect in previous versions of the SOP. Under the SOP 50 10 7 effective on August 1, 2023, SBA Lenders’ options and guidance related to loan ... Read More
