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Jennifer focuses her practice on government guaranteed and conventional commercial lending transactions. She has substantial experience counseling clients in connection with:
- SBA 7(a) loan processing, documentation, closing and funding
- SBA 504 loan processing, documentation, closing and funding
- SBA franchise eligibility analysis
- SBA rules and regulations
- Guaranty repurchase matters
- Conventional loan processing, documentation, closing and funding
Jennifer has also assisted small business clients with a wide variety of corporate governance and transactional matters such as:
- Entity formation
- Purchase/sale of business
- Lease agreements
- Stock Purchase Agreements
ADMISSIONS:
To read more about Jen, click here.
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FEATURED ARTICLE 
Best Practices: Executed Purchase-Sale Agreements
By: Ethan W. Smith, Esquire
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| | Ethan W. Smith, Esquire |
Financing change of ownership transactions can present several unique challenges for lenders that are not part of loans for refinances or startups. From determining what searches are required to ensure the proper lien position, to dealing with the challenges posed by parties to the transaction whose timelines and expectations rarely align with those of the lender, the challenges presented by change of ownership loans can make the loan closing process both stressful and chaotic. One issue that presents itself from time to time is when parties refuse to execute the Purchase and Sale Agreement (or equivalent) until the closing. Most often this situation occurs when the parties have an executed Letter of Intent, but not always. Nevertheless, this situation presents several risks to both the Borrower and the lender that can disrupt the closing process at best, and risk the SBA guaranty at worst.
When the Purchase-Sale Agreement is not finalized at the outset of the transaction, material terms of the deal that can affect the eligibility of the loan may still be in flux. Terms such as the allocation of the purchase price, the terms of any employment or consulting agreements, or perhaps even the method of conveyance may still be changing as the parties negotiate. This can waste a great deal of time and money as the lender reacts to the ever-changing deal terms and attempts to ensure that the deal remains SBA eligible. Additionally, the lender risks the possibility of missing issues which could call the eligibility of the entire deal into question, thereby risking the SBA guaranty.
A more practical issue presented by the absence of an executed Purchase-Sale Agreement is the fact that without this executed contract, there is likely nothing to bind the seller to following through with the deal. Not only does the lender risk wasting its own time and money pursuing a transaction that the seller could walk away from at any time without penalty, but the lender also risks taking the borrower down the same path. Although it is uncertain whether the lender owes a duty to a borrower to avoid getting the borrower into this situation, it is not inconceivable that a lender could be subject to liability for encouraging a borrower to pursue a transaction that the seller is not obligated to follow through on. The most prudent course of action is to avoid these risks by requiring an executed purchase contract prior to working on the loan.
Regardless of the circumstances, the lack of an executed, enforceable Purchase and Sale Agreement presents unnecessary and unacceptable risks to both the purchaser/borrower and the lender. By requiring an executed Purchase and Sale Agreement early in the due diligence process, lenders can avoid the risks both to themselves and their borrowers.
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SEMINARS & EVENTS
Avoiding Lender Liability Presented By: SBA West Virginia District Office Instructor: Ethan W. Smith Date: May 17, 2016 at 11:00am EST Location: Webinar
For more information about this event, and/or to register, click here.
Closing & Funding the SBA Loan Presented By: NAGGL & Georgia Lenders Quality Circle Instructor: David W. Starfield Date: May 17, 2016 & May 18, 2016 Location: Georgia State University, Atlanta, Georgia
For more information about this event and/or to register, click here.
WPASGL 2016 Quality Circle Presented By: Western Pennsylvania Association for SBA Guaranteed Lending (WPASGL) Instructor: Kimberly A. Rayer Date: May 22, 2016 through May 23, 2016 Location: Nemacolin Woodlands
For more information about this event, and/or to register, click here. | |
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WHAT OUR CLIENTS SAY...
Greg Poehlmann / President / 44 Business Capital, LLC
I have been using the law firm of Starfield and Smith for almost 20 years. I have been an SBA lender with 5 lenders in that span and whenever I have introduced Starfield & Smith to a new company, they become an integral part of its SBA lending operation. Not because I had any influence but because their work and professionalism speak for themselves. I have utilized Starfield and Smith in all facets of SBA lending, from closing to servicing to liquidation. Their expertise and industry knowledge is unmatched in the industry. On a personal note, they guided my partners and I through the complex task of establishing our company, 44 Business Capital, which has become the #1 SBA lender by volume in the Philadelphia market. I am grateful that Starfield and Smith are such active members in the SBA industry since their true goals and objectives align with all the other members of this unique business community: helping small businesses in this country grow, prosper and succeed!
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