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IN THE SPOTLIGHT

Timothy D'Lauro, Esq.

Tim is an associate in Starfield & Smith's Fort Washington office. Tim's areas of practice include commercial lending, finance, real estate and corporate law. Tim assists commercial lenders with loan documentation, eligibility determinations, closing issues and with the drafting and negotiation of corporate and finance documents related to conventional loans and government guaranteed loans through the SBA 7(a) and 504 loan programs.

Representing financial institutions nationwide, including national banks, community banks, credit unions and nonbank lenders, who extend commercial credit facilities to small and mid size businesses, he has extensive experience as closing counsel for various types of financial transactions.

Tim is an approved closing attorney for certified development companies which facilitate the U.S. Small Business Administration 504 loan program. In such representation, he assists borrowers and third party lenders in understanding all the complexities in the requirements and funding process under the SBA 504 loan program. He also works closely with local SBA District Counsel to ensure the eligibility of the loan submissions for inclusion in the applicable monthly debenture fundings.

Tim's practice also includes review of already-closed government guaranteed loan packages to assess compliance with program requirements.

ADMISSIONS:

Pennsylvania
New Jersey

To read more about Tim, click here.

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FEATURED ARTICLE

Best Practices: Consideration for Environmentally Contaminated Commercial Real Estate

By: Sarah K. Minteer, Esquire

Sarah K. Minteer, Esquire

When SBA loan proceeds are being used to purchase commercial property, the SOP 50 10 H requires that the Lender perform an environmental investigation of the property, and failure to do so can result in a denial of the guaranty. The type of environmental investigation that is required is based on the risk of contamination of the property.

If environmental contamination is found on the property, or if environmental remediation is ongoing, SBA loans may not be approved or disbursed until the environmental risks have been satisfactorily minimized. The SBA requires a consideration of the following when determining whether loans may be approved or disbursed when there is contamination or on-going remediation:

The nature and extent of the contamination, considering relevant environmental investigation reports;
Remediation: the recommended method, status of the on-going remediation, the cost, estimated completion date and the responsible person(s)
Collateral value, assessing the proposed loan amount and use of proceeds, the appraised value of the property and any institutional or engineering controls that affect the collateral value and marketability of the property.
Mitigating factors, if any, including indemnification, completed remediation, a letter indicating that no further action is required, a letter indicating that contamination is minimal, the establishment of an escrow account holding 150% of the amount estimated to complete the remediation, whether groundwater contamination is coming from another site and whether additional or substitute collateral is being pledged.

An additional mitigating factor that the SBA will look at is whether any responsible person, who is not the Borrower or the Operating Company, possesses sufficient financial resources to cover the costs of remediation. If such person is available, the SBA will require this third party to sign the SBA Environmental Indemnification Agreement. However, lenders should be mindful that an indemnification agreement is only as strong as the indemnifying party, and that unless the indemnitor is large and has significant resources at its disposal, an indemnification agreement, standing alone, may be insufficient to adequately minimize the risk of contamination.

For more information regarding environmental requirements for SBA guaranteed loans, please contact Sarah at 267-470-1217 or at sminteer@starfieldsmith.com.

SEMINARS & EVENTS

Mistakes That Can Cost You Your Guarantee

Presented By: SBA West Virginia District Office
Instructor: Ethan W. Smith
Date: October 27, 2015
Location: Webinar

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...

Stuart Forsyth / Market President & Chief Lending Officer / HomeBanc, N.A.

We rely upon Starfield & Smith as our compliance counsel for our SBA lending business, and we have been very pleased with the level of service that the firm provides to us. Starfield & Smith's attorneys are very knowledgeable regarding all aspects of the life span of an SBA loan, from origination to servicing to liquidation and guarantee proceedings, and they consistently provide us with prompt, responsive, and practical advice. We have found Starfield & Smith to be a particularly valuable advisor and counselor in instances where it has become necessary for our bank to request that the SBA honor its guaranty. We would strongly recommend the attorneys at Starfield & Smith to other SBA lenders that are seeking guidance on SBA compliance issues.