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Emailed by the National Association of Government Guaranteed Lenders to its members.
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All rights reserved. © 2011, NAGGL, Inc. |
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- Huntington Beach, CA
Tuesday, October 25 -
 - Working Capital Delegated Authority
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- November 9-10 - Understanding the SOP 50 10 - San Jose, CA
- November 14-25 - SBA Loan Servicing & Liquidation - Denver
- December 5-6 - Closing & Funding the SBA Loan - Indianapolis, IN (very limited seating available)
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Agenda >
SBA Loans = Jobs Just announced -- Featured Speaker - Wednesday October 26 Luncheon - Retired Staff Sergeant Shilo A. Harris
Retired SSG Shilo Harris is currently the Outreach Coordinator for the US Army Wounded Warrior Program (AW2) , mentoring other wounded soldiers as they return home from war. He draws on his own 2-plus- year recovery following a 2007 IED attack in Baghdad that left Harris with third degree burns over 35% of his body, fractures, and in a coma for 48 days. Harris is an inspiration to others as he advocates for Warriors in Transition. He assists the nation's soldiers as they recover physically and emotionally while gaining the independence needed to begin the difficult journey of seeking jobs and business opportunities. NAGGL is honored to host Retired SSG Shilo Harris at our conference to hear his message of triumph over adversity. More > Tempered Steel - The Stories Behind the Scars, uniting wounded warriors with the public through Dialogue > |
| Resources | |
Every month, NAGGL posts current interest rate information in this space and in the right column of the naggl.org homepage.
October 2011 Rates
SBA LIBOR Base Rate = 3.24%
SBA FIXED Base Rate = 4.84%
Maximum allowable fixed rates >
SBA Peg Rate = 3.125%
(September 30-December 31, 2011)
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NEW 7(a) Loan Authorization
Get it here >
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SBA Loan Portfolio Performance
FY 2000-FY 2010 by:
 NAICS >
Franchise >
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FORM 1086 >
FORM 159 >
Weekly 7(a) Gross Loan Volume Reports >
Approved Loan Lists by Lender, State -- as of August 31>
SBA Notice Archive from 2000 to the present >
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NAGGL Lender Compensation Survey Results (login required)
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MEET SERVICE PROVIDERS
Meet the Folks that Make YOUR Job Easier Need an Appraisal? Environmental Report? Lawyer? Packager? Outsourced Processing or Servicing? SBA Lending Software? Business Valuator? or any other type of service? Find them at >
www.naggl.org/LSPs
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Visit the IFA's Credit Access Center to find articles, Credit Access Toolkit, Credit Access Research and more!
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| Daily News | |
Get your fix of daily SBA lending news in one convenient location, when you want it. We cull through articles and post only the truly important ones--every day. Visit this web page every morning as you enjoy that first cuppa Joe! (Bookmark the link and check in every day.)
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IN THE NEWS
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NEW Offer in Compromise (OIC) Tabs -- Use Now MANDATORY
(Version dated October 2011)
On October 12, SBA posted a revision to its June 2011 Offer in Compromise Tabs. It is important to know that when submitting any Offer in Compromise (OIC) to the agency for its approval, use of this set of Tabs is now MANDATORY. And recall that all Offers in Compromise must be approved by SBA. [The only exception according the current Matrix is found in Footnote 4: "Compromise with borrower or guarantor of all or a portion of accrued interest is permitted as a unilateral action."]
The tabs describe when an OIC might be appropriate: "When it appears likely that the borrower does not have the ability to pay in full the deficiency balance after liquidation of all worthwhile collateral, it may be appropriate to settle for less than the full amount due. The amount being offered must bear a reasonable relationship to the estimated net present value of the projected amount of recovery available through enforced collection. Therefore, when the liability of the borrower is clear and the SBA can collect fully without protracted litigation or large unrecoverable expenses, there is little basis to settle for less than what is owed." In other words, the core requirement is that a Compromise amount must bear a reasonable relationship to the amount that could be recovered through enforced collection.
The former set of fillable OIC tabs consisted of 9 Tabs; the new set has only 8 as the result of simplifying and grouping together similar items (particularly SBA documentation that must be submitted). The result is a set of easy-to-use and follow Tabs.
Tab 1 = OIC Information Sheet - no substantive change from 6/21/2011 version.
Tab 2 = now called Obligors/Collateral worksheet that allows lenders to easily list all collateral, its lien position per the Authorization and its current lien position, and the status of the collateral (remaining, liquidated, substituted or abandoned). The Guarantor Per Loan Authorization Worksheet is similarly formatted -- Name - and status (remaining, released, offeror or bankrupt). The change makes supplying the information a more user-friendly check the appropriate box form.
Tab 3 = Recovery Worksheet (former version this was Summary of General Information on loan, offeror, etc.) The new Recovery Worksheet requires a listing of all recoveries from sale of collateral that includes date, what the collateral was, and the amount applied to the indebtedness -- as well as all supporting documentation such as HUD 1 sheet(s), auctioneer's report, settlement statement(s), etc.
Tab 4 = Summary -- same as 6/21/2011 version Tab 3, asks for narrative on loan's major features and reasons for problems, involvement of offeror in business, offeror's current employment, earnings, number of dependents, general health; explanation of any possible fraud; and whether the offeror was cooperative in gaining the best possible recovery from business assets.
Tab 5 = Financial Analysis [the same as 6/21/2011 version Tab 4] -- Asks lender to "Provide your comprehensive evaluation of the offeror's financial situation for SBA to determine the appropriateness of the offer including a summary of your efforts to verify the ability to pay and available assets using credit reports, asset search reports, and last two years' tax returns." Also requires lender's comments and recommendation.
Tab 6 = SBA Documentation -- This new tab is a consolidation of the 6/2011 version Tabs 5, 6, 7--as well as the requirement on old Tab 1 for providing a copy of the Loan Authorization. A big improvement on the former tabs.
Tab 7 = Asset Valuations -- formerly Tab 8 - Valuations -- other than an introductory explanation, "A Post-Default Appraisal is necessary to determine the Liquidation Value of real or personal property collateral", the tabs are identical.
Tab 8 = Litigative Risks -- was Tab 9 in 6/21/2011 version that was labeled Litigative Probabilities. New Tab 8 makes it clear that this analysis is REQUIRED, and expands the examples of factors that could prohibit the agency's ability to fully collect from guarantors. The 'for example' factors include: Litigation expenses, statute of limitations, bankruptcy exemptions, homestead exemptions, jointly held property, tenants by the entirety, anti-deficiency states, redemption rights, one action states. [Bold examples are new in this version of the OIC Tabs.)
Get the tabs >
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504 Debt Refinancing Changes - Final Rule
| by Thomas Wallace (IDS Corporation, Fort Myers, FL)
On Wednesday, October 12 the Federal Register contained the language for the final rule for the SBA 504 Temporary Refinance Program. Federal Register, 12 October 2011; Vol. 76 No. 197 pages 63151-63156). The critical changes include specifics for the eligibility of working capital expenses through the temporary program, the elimination of the requirement that the Third Party Loan equal fifty percent (50%) of the current fair market value per a current appraisal, and modifications for the determination of eligibility for qualified debt to refinance regarding loan genealogy and currency of payment status specific to loan modifications. These changes are in line with many comments received by SBA, including those submitted by NAGGL.
Working capital expenses already incurred or coming due within eighteen (18) months may now be included in 504 temporary refinance projects, subject to Borrower and CDC certification of the costs with further substantiation at the request of SBA. The maximum loan will still be limited to 90% of the fair market value, as determined by a current appraisal acceptable to SBA. By providing long term and low fixed rate financing for a finite component of working capital needs SBA will provide a significant working capital support for small businesses.
The Third Party Loan must be equal to the 504 loan, meaning we assume the net debenture, and still operating under the 90% of the fair market value limitation as above. This removes the former requirement that the Third Party Loan equal fifty percent (50%) of the currently appraised fair market value. This removes a significant disincentive to use of the program by allowing lenders and borrowers to more fully utilize the long term low fixed rate financing offered by the 504.
Finally, the definition of "Qualified Debt" was simplified and broadened. The simplification deals with the level of documentation required to demonstrate that a loan was used "substantially all ...was for the acquisition of Eligible Fixed Assets". In short, if the original underlying loan met this standard and the loan to be refinanced is cast as a commercial loan, the loan will be deemed eligible. Borrower and Third Party Lender certification of the above is required and SBA retains the right to request further documentation. The broadening deals with the issue of loan modifications and allows loans current under pre-existing written modifications to be considered eligible for refinance. The first change removes a significant documentary hurdle to using the program and the second recognizes that a Borrower and Lender should not be penalized for pro-active approaches to working through the recent economic turmoil.
In short, these are major and very positive changes, and because of them, the 504 Temporary Refinance Program is a substantially more viable tool.
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National Association of Government Guaranteed Lenders, Inc. © 2011, NAGGL, Inc.
All rights reserved. Nothing may be reprinted in whole or part without written permission from NAGGL. www.naggl.org |
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