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SpotlightAttorney Spotlight 
Kimberly A. Rayer, Esq.

Kimberly A. Rayer, Esq.

 

 

Kim concentrates her practice in the areas of financial services, commercial contracts, real estate and corporate law. Kim has extensive experience representing banks, financial institutions, as well as companies in connection with commercial financing transactions, including acquisition financing, asset-based financing, healthcare receivable financing and other secured transactions. She has experience with intercreditor relationships, as well as creditor's rights in bankruptcy. Kim also advises small businesses on corporate governance and transactional matters.


 

Kim is admitted to practice before the Supreme Courts of Pennsylvania and New Jersey and the Federal District Court for the Eastern District of Pennsylvania. She is a member of the Philadelphia Bar Association and the National Association of Government Guaranteed Lenders (NAGGL).


 

Kim is a graduate of Drexel University where she received a Bachelor of Science Degree, cum laude, and the James E. Beasley School of Law, Temple University, where she earned a Juris Doctor degree.

 

 

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Feature 

BEST PRACTICES: FICTITIOUS NAMES

By Janet M. Dery, Esq. 

 

Janet M. Dery, Esq.

Janet M. Dery, Esq.

 

                In U.S. Small Business Administration ("SBA") guaranteed lending there seems to be some confusion over the importance of a business entity's fictitious name, also known as a trade name or doing business as ("dba") name.  Many lenders are unclear as to whether it is just a "naming convention" used by the SBA to identify its loans, or if it has greater significance.

 

                Generally, a fictitious name is a name that a business operates under but which is different than the "legal name" of  the business entity.  Legal name includes the name of a sole proprietor or the name stated on an entity's Articles of Incorporation/Organization/Formation that is filed in its home state.   Because fictitious names are often registered with company designators such as "Inc." or "LLC" lenders should take care to confirm the correct legal name of its borrower before ordering searches or drafting loan documents.

 

SBA requires lenders to confirm with the appropriate governmental office that the business entity has properly registered its fictitious name filing (state law generally controls whether the filing of a fictitious name can be done and where it should be filed).  Most states that do require filing of a fictitious name do so for notice purposes.  The registration allows a party that has a claim against the business entity, but only knows the fictitious name, to discover the correct business entity to pursue.  

 

For a business entity, the benefit of doing business under a fictitious name may arise from the good will associated with the business name, whether through a franchise name that is widely known or as a long-standing and respected business in a local community.  Please note that many franchise agreements provide that a franchisee may only file a fictitious name filing if expressly permitted by the franchisor.  Accordingly, the franchise agreement entered into by the business should be reviewed to see if registration of the trade name is permitted.  

 

                For a lender, the fictitious name provides guidance on what type of business the borrower will be engaged in.  If the name is a franchise name and that franchise is listed on the SBA Franchise Registry, then the lender can obtain the payment and default history of SBA guaranteed loans to other franchisees.  The fictitious name also acts as the loan name when the SBA agrees to guaranty a loan to the business entity. 

 

                Most lenders believe that the fictitious name is important and should be included in the loan documents.  However, lenders disagree about how it should be included and in what capacity.   The best practice for including the fictitious name in the loan documents is to minimize its inclusion in the loan documents.  Fictitious names should never be used on UCC-1 financing statements as Article 9 of the Uniform Commercial Code requires the use of the borrower's correct legal name to properly perfect the lender's lien.  Additionally, use of a fictitious name in security documents could be read to limit a lender's blanket lien to those assets used in the business that operates under that trade name.  Although the risk is small, employing these best practices may help avoid repairs to your SBA guaranty.

 

                For more information on fictitious names or other business entity documentation, contact Janet at 215-542-7070, or [email protected]  

 

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...that Starfield and Smith provides loan documentation and closing services for SBA 7(a) loans to its lender clients nationwide?
 
Call 215-542-7070 for more information, or visit our website at www.starfieldsmith.com

 

 

  

 SeminarSeminars and Events
    
Closing & Funding the SBA Loan

 

Presented by: NAGGL

Instructors: David W. Starfield

Date: March 14th, 2011
Location: Garden Grove, CA
  
For more information, click here
To register, click here.
  
  
Advance SBA Loan Documentation and Closing

 

Presented by: NAGGL

Instructors: David W. Starfield

Date: March 16th, 2011
Location: Garden Grove, CA
  
For more information, click here.
To register, click here.

 

 

The Guarantee Purchase Process

 

Presented by: NAGGL

Instructors: David W. Starfield

Date: March 17th, 2011
Location: Garden Grove, CA
  
For more information, click here.
To register, click here.
  
  
Fundamentals of SBA Lending:
Documenting, Closing & Funding the SBA Loan

Presented by: Lorman Education Services

Instructors: Kimberly A. Rayer
Date: March 24th, 2011
Time: 1:00 pm - 2:30 pm EST
Location: Webinar

 

For more information about and to register for the March 3rd webinar, click here

 

For more information about and to register for the March 24th webinar, click here.

 

 

Closing & Funding the SBA Loan

 

Presented by: NAGGL

Instructors: Ethan W. Smith

Date: April 11th, 2011

Location: Peabody, MA
  
For more information, click here.
To register, click here.
  
  
Advance SBA Loan Documentation and Closing

 

Presented by: NAGGL

Instructors: David W. Starfield

Date: May 2nd, 2011
Location: Atlanta, GA - NAGGL SBA Lending Technical Conference
  
For more information, click here.
To register, click here.
Shocked Man

 

ContactInfo Starfield & Smith, P.C.
Pennsylvania Office
501 Office Center Drive,
Suite 350 | Ft. Washington, PA 19034
phone: (215) 542-7070 | fax: (215) 542-0723

 

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1516 West Lake Street, Suite 303 | Minneapolis, MN 55408
phone: (612) 208-0877 | fax: (215) 542-0723

http://www.starfieldsmith.com
 
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