Sba Loan Program Requirements Management Agreement

Where a potential loan involves a management agreement, lenders dealing with credits within their delegated jurisdiction must (i) obtain a copy of the management agreement, (ii) conduct a membership analysis in accordance with paragraph 13 C.F.R. § 121.301 (f) (3) and (iii) keep a copy of the agreement and a detailed membership analysis in the loan file. Non-delegated lenders must submit to the LGPC a copy of the management agreement with their request for reconsideration by the Centre`s SBA staff. SBA franchise consultants do not re-advertise management agreements and such agreements are not displayed in the list of SBA franchises. The boilerplate reflects the current SBA directive and is considered an annex to SOP 50-10. It will be updated as necessary to reflect changes to the Directive in subsequent regulations, indications or SOP amendments. The wizard is also updated if necessary to troubleshoot technical issues or update the programming used. The updated boiler trays are edited by manual and replace all previous versions. Boilerplate updates are available in the For Lenders section of the website. Payment of the proceeds of the loan only for the purposes indicated in the authorisation If an applicant has a management contract and the undertaking is considered to be an active undertaking, affiliation may arise if the management company has the sole discretion over the activity with minimal control of management decisions by the applicant. In such cases, lenders should confirm that the applicant, the management company and all associated enterprises together meet the size of each sector. If the lender has already paid the guarantee fee and then reduced the loan amount after a first payment – No repayment. In addition to the borrowing and insurance provisions discussed above, the SBA imposes certain documentation requirements on the lender when the portion of the construction financing guaranteed by the SBA exceeds $125,000.

For example, the lender is required to obtain a copy of the borrower`s construction contract, which must not exceed a certain price. The authorization establishes provisions that must be included in the construction contract if the borrower requests or accepts substantial changes to the plans. If the borrower invests its own resources in the construction project, the lender must be able to prove that it has done so before it can make loans secured by SBA. Each authorization contains an advance language that must be inserted as follows in the repayment conditions section of the bond: for loans sold on the secondary market – Multiple borrowers – The lender may grant a single loan 7 (a) to several borrowers (but several EPCs are not admissible), provided that each company is complicit and any person holding 20% or more of one of the applicant companies, it is a guarantor. The „SBA Loan Name“ and the „Borrower“ are generally not identical. In accordance with the SBA agreement on the loan name, the borrower`s name is the last option for the SBA loan name. If any of the names have changed since the date of loan approval, the lender must notify the SBA and document the changes to the authorization. The SBA will consider waiving this requirement if the lender meets certain strict conditions. As a general rule, the lender must provide adequate documentation of the project and monitor the disbursement of loan revenues very closely. This involves the use of construction mortgages and the waiver of the deposit in order to protect the lender and the SBA and place their rights before all others.

In addition, the lender must demonstrate that the borrower has made a necessary equity contribution to pay for the early phases of construction. PLP lenders have the authority to grant this waiver, provided that the lender documents the waiver in writing and inserts the documentation into the loan file. For loans with a term of more than 12 months, the guarantee fee is due within 90 days of the date of credit approval to the SBA. .