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IN THE SPOTLIGHT
 | Timothy D'Lauro, Esq. |
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Timothy's areas of practice include commercial lending, finance, real estate and corporate law. He assists commercial lenders with loan documentation, closing issues and with the drafting of corporate and finance documents related to conventional loans and government guaranteed loans through the SBA 7(a) and 504 loan programs.
He counsels small businesses on regulatory and licensing matters at the state and federal level, as well as corporate governance and other general business matters.
Tim is an approved closing attorney for certified development companies which facilitate U.S. Small Business Administration loan programs. He also reviews SBA guaranteed loan files and advises lenders on eligibility matters as well as documenting and closing loans under the SBA 7(a) and 504 loan programs to assist lenders in preserving and protecting their government guaranty.
ADMISSIONS: * Pennsylvania * New Jersey
To read more about Tim, click here.
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FEATURED ARTICLE
Best Practices: What Lenders Need to Know about SBA Forms 1919 and 1920SX for 7(a) Applications
By: Janet M. Dery, Esquire
 | Janet M. Dery, Esquire |
With SOP 50 10 5(F) having gone into effect on January 1, 2014, lenders now have the obligation to use SBA Forms 1919 and 1920SX for all 7(a) loan applications, instead of the SBA Forms 4 and 4I. Following is some useful information about these forms that lenders should be aware of.
- Form 1919 is to be completed by and signed by the sole proprietor, all 20% or more owners of the business entity (for partnership, all general partners and any limited partners owning 20% or more of the equity in the partnership), all directors, officers, and managers of the business entity, including any day-to-day managers of the business entity, and any person required to be a guarantor under SOP 50 10 5(F).
- Form 1919 incorporates the provisions of SBA Forms 912 (Statement of Personal History), 1261 (Statements Required by Laws and Executive Orders), and 1624 (Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion Lower Tier Covered Transactions). Until a revised Form 1919 is released for use by the U.S. Small Business Administration ("SBA"), a separate Form 912 will need to be completed by all persons completing the Form 1919. Once the new Form 1919 is released by the SBA, a lender will only need a separate Form 912 to be completed if any of the answers to Questions 1-3 on Form 1919 are positive. Questions 14 and 15 of Form 1919 also indicate when SBA Forms 159 (Fee Disclosure Form and Compensation Agreement) and 601 (Agreement of Compliance) will need to be completed.
- At the end of Form 1919, the SBA has included a certification wherein the party executing the Form acknowledges that any false statement made in the completed form or any of the supporting documents provided by such party may subject the party to criminal penalties under 18 U.S.C. §1001 or 18 USC § 1014. It further summarizes the potential fine amounts and possible jail time for any false statement made under such statutes.
- All three Parts of the current Form 1920SX are required to be completed by 7(a) lenders. Form 1920SX (Part A) contains the following certification:
"I approve this application to SBA subject to the terms and conditions stated in this and the attached documents. Without the participation of SBA, to the extent applied for, we would not be willing to make this loan and in our opinion the financial assistance approved is not otherwise available on reasonable terms. I certify that none of the Lender's Associates, including but not limited to its employees, officers, directors, or substantial stockholders (more than 10%) has a financial interest in the Applicant. I approve and certify that the Applicant is a small business according to the standards in 13 CFR Section 121, the loan proceeds will be used for an eligible purpose, and the owners and managers of the applicant business are of good character."
A lender should make sure to verify the information being certified in this paragraph and should document such verification. Untrue certifications can be prosecuted under 18 U.S.C. §1001. With the current economic atmosphere and sharp focus on preventing fraud, the SBA has become increasingly aggressive in prosecuting loan applicants and lenders that willfully violate 18 U.S.C. §1001.
Lenders who were already working with loan applicants that had not submitted an application prior to January 1, 2014 should make sure that they provide Form 1919 to such applicants for completion, instead of SBA Form 4. Similarly, once the updated Form 1919 and 1920SX are released by the SBA, lenders will need to make sure that all applicants complete the correct version of Form 1919. The SBA will expect the proper Forms to be in a lender's file should a guaranty purchase request ever need to be submitted.
For more information regarding the Form 1919 and Form 1920SX, please contact Janet at jdery@starfieldsmith.com or at 215.542.7070.
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EVENTS & SEMINARS 
2014 Southeastern Small Business Lenders Conference Dates: February 9 - 11, 2014 For more information about this event and/or to register, click here.
Date: March 12 - 14, 2014
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Date: May 6 - 8, 2014
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Robert R. Dwyer / Senior Vice President / Noah Bank
The law firm of Starfield and Smith is unparalleled in its professionalism and expertise. On a daily basis, every single member of the firm, from the top to bottom, breaks down the typical stereotype of staid, overly cautious legal work. They do this by rolling up their sleeves and cranking out the work while telling it straight to the client. Their advice and product is always spot-on and delivered timely. They are a essential part of my business. The firm, and everyone in it, is at the top of their game.
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