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IN THE SPOTLIGHT
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Kristen is an associate in Starfield & Smith's Florida office and she concentrates her practice in the areas of commercial lending, real estate, contracts and corporate law. As closing counsel for various financial institutions (including banks, credit unions and certified development companies) that extend commercial credit facilities to small and mid-size businesses, she drafts, analyzes, and negotiates documents for government guaranteed loans through SBA 7(a) and 504 loan programs and conventional loans.
Kristen also reviews SBA guaranteed loan files and advises lenders on eligibility matters, due diligence documentation, and closing issues in order to preserve and protect their government guarantees. Kristen has closed many commercial finance transactions from start-up business transactions to complex real estate and business acquisitions. She has also worked on financings under the SBA CAPLine, Export Working Capital, and USDA Business and Industry loan programs.
ADMISSIONS:
- Florida
- District of Columbia
To read more about Kristen, click here.
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FEATURED ARTICLE 
Best Practices: Program Integrity and Loan Agents
By: Jennifer Borra, Esquire
SBA lenders have a responsibility to ensure that they maintain the integrity of the SBA loan programs throughout their institutions. 13 CFR §120.140(f) prohibits SBA lenders from engaging "in conduct reflecting a lack of business integrity or honesty"; and the SBA monitors the lending practices of its participant lenders to assure compliance.
The SBA's Office of Credit Risk Management manages not only credit risk, but oversees lender performance in order to assure that program requirements are met. Similarly, the Office of Inspector General provides independent, objective oversight to improve the integrity, accountability and performance within the SBA loan programs. Indeed, the September 25, 2015 OIG Audit Report, SBA Needs To Improve Its Oversight Of Loan Agents, expressed the need for the SBA to improve its oversight of loans originated by referral agents, noting that loans involving such referral agents "defaulted at a rate 28 percent higher than loans where no referral fee was reported." In its report, the OIG also identified over $327 million of SBA 7a loans that involved loan agent fraud. Other OIG reports have focused on lenders' responsibility to not only monitor agents but establish internal controls so that their employees adhere to required SBA standards.
The consequences for failing to follow Loan Program Requirements to ensure program integrity can be severe. On September 25, 2015, a former bank official entered a guilty plea to conspiring with senior bank executives to issue hundreds of millions of dollars of fraudulent SBA loans to unqualified or ineligible borrowers. Several of the bank's executives have gone to jail and the bank has been closed by its regulators.
The temptation to underwrite bad loans or circumvent SBA rules or regulations must be resisted for SBA loan programs to thrive and for small businesses to succeed. If your institution is not monitoring its agents, its employees or otherwise devoting its efforts to establishing internal controls to avoid loan agent fraud, the federal government may utilize its vast resources and enforcement authority to investigate and prosecute offending institutions for such transgressions. Accordingly, smart SBA lenders will adopt best practices to ensure that they proactively minimize the potential risks of loan agent fraud.
For more information regarding SBA lender oversight and program integrity, please contact Jen at 267-470-1206 or at jborra@starfieldsmith.com.
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SEMINARS & EVENTS
WPASGL 2015 Fall Training
** TOMORROW **
Presented By: Western Pennsylvania Association of SBA Guaranteed Lenders
Instructor: Kimberly A. Rayer
Date: October 8, 2015
Location: The Meadows Racetrack Casino, Washington, PA
For more information about this event and/or to register, click here.
NAGGL Annual Conference
Presented By: NAGGL
Date: November 2, 2015 - November 6, 2015
Location: The Cosmopolitan of Las Vegas
** SOLD OUT **
How to get SBA to Honor Its Guaranty
Presented By: NAGGL
Instructor: Ethan W. Smith
Date: November 5, 2015
Location: The Cosmopolitan of Las Vegas
For more information about this event and/or to register, click here.
Advanced SBA Loan Closing & Documentation
Presented By: NAGGL
Instructor: David W. Starfield
Date: November 5, 2015 - November 6, 2015
Location: The Cosmopolitan of Las Vegas
For more information about this event and/or to register, click here. |
WHAT OUR CLIENTS SAY...
Donald Tyson / Senior Vice President / The Bancorp Bank
When The Bancorp Bank made the strategic decision in 2009 to become a national SBA lender, our first call was to Ethan Smith at Starfield & Smith. I had worked with Ethan in deals where he represented the SBA lender and was impressed by the firm's capacity to handle a particularly complicated management buy-out with multiple layers of financing provided by multiple firms. This deal involved a credit line, an SBA term loan, a mezzanine loan, and private equity from multiple investors, not to mention an obstinate seller. The legal side of the deal could not have gone more smoothly. Bancorp's SBA team has been very successful and we have relied on the guidance of Starfield & Smith every step of the way. They work to earn our trust every day and we could not be more pleased with our relationship with them. They have a well earned national reputation for expertise in SBA lending that is unmatched.
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