Best Practices: Reviewing Management Agreements Under the New Rules
https://starfieldsmith.com/wp-content/uploads/2023/06/best-practices-reviewing-management-agreements.f13ba74b-d20c-40d0-b78c-a482d01de761-1-1.mp3 Last week in our article, Best Practices: The Affiliation Rule Change, we discussed how lenders are no longer required to review matters of control when performing an affiliation analysis, and that affiliates are determined primarily through common ownership. As a part of this change, SBA removed provisions stating that management agreements must be reviewed ... Read More
Best Practices: The Affiliation Rule Change
The cornerstone of SBA lending has always been and will continue to be reaching businesses that are, in fact, small. The way that small business is defined has shifted drastically under Procedural Notice 5000-846607 “Implementation of the Final Rule on Affiliation and Lending Criteria for the SBA Business Loan Programs,” which is in effect now, ... Read More
Best Practices: Do What You Do
“Prudence is a presumption of the future, contracted from the experience of time past.” – Thomas Hobbes SOP 50 10 7 didn’t introduce the concept of SBA requirements being rooted in policies for similarly-sized, non-SBA guaranteed commercial loans, but it certainly expands and more heavily relies upon its use. A standard that SBA internally refers ... Read More
Best Practices: SOP 50 10 7 – “All That Glitters Is Not Gold”
This famous line from Shakespeare’s Merchant of Venice seems an odd way to begin an article on SBA lending. Nevertheless, SBA released the long-awaited SOP 50 10 7 (“SOP”) on May 10, 2023. Like the Affiliation Rule and SBLC Rule, which became effective on May 11 and 12, respectively, the SOP brings wholesale changes to ... Read More
Best Practices: How Community Advantage Pilot Lenders Can Become Community Advantage Small Business Lending Companies
The Final Rule: Small Business Lending Company (SBLC) Moratorium Recission and Removal of the Requirement for a Loan Authorization (88 FR 21890, commonly known as the “SBLC Rule”) becomes effective on May 12, 2023. The purpose of the SBLC Rule is to: (1) lift the moratorium on licensing new Small Business Lending Companies (“SBLCs”) and ... Read More
Best Practices: Who Must Guarantee an SBA Loan?
Generally speaking, every SBA 7(a) loan must be guaranteed by at least one individual or entity. The SBA has set out different criteria and requirements for different types of guarantors. SBA Form 148 (Unconditional Guarantee) and SBA Form 148L (Limited Guarantee) are the standard documents for providing a guaranty on an SBA loan. The SBA ... Read More
