Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

SBA 504 Packaging Issues and Tips Lerch Early at America East

745 views

Published on

SBA loans: How to issue your 504 loan commitment for permanent and interim financing, collection of due diligence and the loan closing process.

Published in: Business, Economy & Finance
  • Be the first to comment

  • Be the first to like this

SBA 504 Packaging Issues and Tips Lerch Early at America East

  1. 1. 504 Packaging Tips- Closing Your Loan to Ensure Perfect Packaging Alison W. Rind Lerch, Early & Brewer, Chtd.www.lerchearly.com August 2, 2012
  2. 2. Overview Issuing Your Loan Commitment For Permanent and Interim Financing Collection of Due Diligence Closing Process  Simultaneous Closing  Closing After Disbursement2 Completion © Lerch, Early & Brewer, Chtd. 2012 www.lerchearly.com
  3. 3. Loan Commitment Make sure Permanent and Interim Loans Match SBA/CDC Approval  Request Copy of Authorization Loan Fees  InterimLoan Fee – Eligible Project Cost  Third Party Lender Fee Borrower and Guarantor3 © Lerch, Early & Brewer, Chtd. 2012 www.lerchearly.com
  4. 4. Commitment Letter (continued) Collateral  Preference Issues  Interim Loan Security4 © Lerch, Early & Brewer, Chtd. 2012 www.lerchearly.com
  5. 5. Loan Commitment (continued) Make sure interim loan term is sufficient for debenture funding  If simultaneous closing, allow at least 3 months  If disbursements are anticipated for 6 months, then term should be at least 9 months  Interim term is defined as the sooner of5 term in months or funding of debenture © Lerch, Early & Brewer, Chtd. 2012 www.lerchearly.com
  6. 6. Checklist Include Documentation Required for Permanent/Interim Loan Closing and CDC Closing  Organizational Documents  TitleWork  Appraisal  Environmental  Sales Contract6 © Lerch, Early & Brewer, Chtd. 2012 www.lerchearly.com
  7. 7. Checklist (continued) Lien Searches Insurance SBA Approvals Leases Loan Documents Financial Statements7 © Lerch, Early & Brewer, Chtd. 2012 www.lerchearly.com
  8. 8. Checklist (continued) Copy CDC/CDC Counsel on All Due Diligence Items Received Request Property Insurance and Title Insurance for permanent loan, interim loan and CDC loan simultaneously8 © Lerch, Early & Brewer, Chtd. 2012 www.lerchearly.com
  9. 9. Parties Lender Lender’s Counsel Borrower Borrower’s Counsel Title Company CDC CDC Counsel9 © Lerch, Early & Brewer, Chtd. 2012 www.lerchearly.com
  10. 10. Simultaneous Closing Real Property Purchase (no construction) Refinance Equipment Purchase10 © Lerch, Early & Brewer, Chtd. 2012 www.lerchearly.com
  11. 11. Simultaneous Closing Provide draft loan documents to CDC counsel Execute Third Party Lender Agreement and Interim Lender Certificate Pay Third Party Lender Fee Provide Wiring Information to CDC for wire of debenture11 © Lerch, Early & Brewer, Chtd. 2012 www.lerchearly.com
  12. 12. Construction Contracts Disbursement Requests Lien Waivers Final Certificate of Occupancy Updated Appraisal12 © Lerch, Early & Brewer, Chtd. 2012 www.lerchearly.com
  13. 13. Modifications Remember, both the permanent and interim loan amounts must be modified. Borrower will also be required to inject more equity to maintain the 50-40-10 balance. Submit to the CDC documentation to justify the increase of Project Costs and obtain a revised appraisal, if needed, to support the increased costs. Extension of Interim term may be required13 © Lerch, Early & Brewer, Chtd. 2012 www.lerchearly.com
  14. 14. Speakers  Alison W. Rind is an attorney at Lerch, Early & Brewer who(301) 657-0750 represents commercial lenders inawrind@lerchearly.com loan transactions and other commercial matters. These include participants in SBA and other government-guaranteed lending( programs. 14 © Lerch, Early & Brewer, Chtd. 2012 www.lerchearly.com
  15. 15. For more information Lerch, Early & Brewer, Chtd. 3 Bethesda Metro Center, Suite 460 Bethesda, MD 20814 (301) 986-1300 www.lerchearly.com Thank you for your participation15 © Lerch, Early & Brewer, Chtd. 2012 www.lerchearly.com

×