 |
|
IN THE SPOTLIGHT
| |
Kim concentrates her practice in the areas of commercial lending, commercial contracts and corporate law. She represents financial institutions nationwide, including national banks, community banks, credit unions and non-bank lenders, in extending commercial credit facilities to small and mid size businesses. Kim has extensive experience in the areas of government guaranteed financing, as well as business and real estate acquisition financing, lines of credit, healthcare financing and other secured and non-secured credit transactions. Kim advises lenders on eligibility, documenting and closing loans under the SBA 7(a) and 504 loan programs. As a closing attorney, she prepares commitment letters, reviews credit approval and loan files, drafts, and negotiates loan documents and coordinates closing and funding of transactions. With her experience with Article 9 of the Uniform Commercial Code and the U.S. Bankruptcy Code, Kim assists her clients in lien priority issues, intercreditor agreements, as well as creditor's rights in bankruptcy.
ADMISSIONS:
- Pennsylvania
- New Jersey
- Federal District Court for the Eastern District of Pennsylvania
To read more about Kim, click here.
| |
|
|
Find us on Facebook!
Become our fan on Facebook to receive updates, articles and news pertaining to SBA and lending related topics.
|
|
Starfield & Smith is on LinkedIn!
Link yourself to Starfield & Smith to receive updates, articles and news pertaining to SBA and lending related topics.
|
|
Starfield & Smith, PC is on Twitter!
Follow us for links to our most recent news and articles.
|
|
|
FEATURED ARTICLE 
Best Practices: The Importance of Non-Compete Agreements
By: Kristen G. Dickey, Esquire
|
| | Kristen G. Dickey, Esquire |
A non-compete agreement, or covenant not-to-compete, is a contract between two parties whereby one party agrees not to enter into or start a similar business, profession or trade in competition with the other party for a certain length of time and with a certain geographical area.
The U.S. Small Business Administration ("SBA") requires lenders to use "prudent lending standards" when closing SBA-guaranteed loans. Therefore, it is important that lenders financing a business acquisition closely review the purchase and sale agreement and any ancillary agreements for non-compete terms, as this type of covenant can be crucial to ensuring a new business owner's success. Lenders should also analyze each specific business acquisition loan on its own and determine whether the terms of the non-compete agreement are sufficient for that type of business, the parties, and/or the market.
A non-compete agreement is especially important for a borrower that has agreed to purchase a business in which a large portion of the business assets is designated as goodwill. Just imagine the futility of a new business owner's efforts if the former business owner simply moves to a new location nearby and manages to retain most of its prior customers by using confidential information about operations, trade secrets, or sensitive information such as business practices, products, and marketing plans.
The laws regarding non-compete agreements vary greatly from state to state, but courts will review the terms for reasonableness, good faith, and consideration (any) to determine if a non-compete agreement is enforceable. Typically, an over-broad non-compete agreement will be enforced only to the extent necessary to protect the legitimate business interests of the business owner.
The agreement must be reasonable in terms of:
- Duration - Does the non-compete agreement last for a few months or multiple years? Courts in some states may deem a one year term to be excessive while courts in other states may find a five year term to be reasonable. It is important for lenders to be aware of the varying laws between, and even within, states. Borrower's counsel can be a good resource in determining what is considered reasonable in a particular jurisdiction.
- Geographic scope - A non-compete agreement is more likely to be enforceable if it is limited to a certain geographic area, but lenders must carefully consider what would be a reasonable, yet effective, geographic area instead of using a "one size fits all" approach to their loans.
- Industry - Any non-compete agreement that is not limited to a specific industry or sector would likely be considered unreasonable.
When financing change of ownership transactions, SBA lenders must ensure that their underwriting decisions are reasonable and are calculated to ensure the borrower's success. A lender can jeopardize its SBA guaranty by failing to thoroughly review a non-compete agreement and address related issues.
|
|
SEMINARS & EVENTS
2015 Kentucky SBA Lenders Conference
Presented By: Kentucky SBA Lenders Conference Association
Date: November 20, 2015 - November 6, 2015
Location: The Henry Clay, Louisville, KS
For more information about this event and/or to register, click here.
Closing and Funding the SBA Loan How to Get SBA to Honor Its Guaranty Presented By: NAGGL Instructor: David W. Starfield Date: November 16 - 20, 2015 Location: Stuart (West Palm Beach), FL For more information about this event and/or to register, click here. |
WHAT OUR CLIENTS SAY...
Bob Cota / President / PCFS 2000
It is a pleasure working with a law firm that can provide us with legal advice that also addresses the business aspects of the issues that we deal with. Your counsel, combined with your unique knowledge of the SBA industry, has been a great help to us.
We look forward to a log relationship with the firm.
|
|
|
|
|
