The SBA will then review your loan, check if you have any losses due to COVID-19 and determine if you qualify for a loan. The goal is to make a decision within two to three weeks, although the current volume of applications may influence this. The authorization specifies whether a warranty should be complete or limited. Form SBA 148 is used whenever the guarantor is responsible for repaying the full amount of the borrower`s loan. Form SBA 148L is used whenever the lender intends to limit the scope of the guarantor`s liability. B for example the amount or duration of the guarantee or the limitation of the guarantor`s obligation to the guarantor`s interest in property (real or personal) pledged to guarantee the repayment of the loan. If a warranty is limited, the authorization describes the limitation. Closing is also the last time the lender has an opportunity to discover eligibility and credit issues before the lender pays the loan. The lender may not include in this section of the whitelist only items payable through the borrower`s equity injection or other means not related to the SBA loan, only how the loan funds are to be used. (The lender must request the cancellation of the loan and the repayment of the guarantee fee. The fees reimbursed are paid to the lender, not to the borrower.) Three of the most common shortcomings that lead the SBA to recommend a cancellation, rejection or repair of its guarantee (at the time the lender requires the SBA to comply with its guarantee) occur when the loan is closed: The SBA strongly recommends using the online loan application, which can be found under disasterloan.sba.gov/ela/. You can request free support from the Wisconsin SBDC. SBA issues this number when SBA approves and finances the loan.
This number never changes and should appear on all closing documents and any correspondence the lender has with the SBA related to the loan. Take all the safety precautions that are appropriate for construction loans. Prepare all necessary loan documents and have these documents signed by the appropriate person(s), including spouses, if necessary In addition to the above bonding and insurance conditions, the SBA imposes certain documentation requirements on the lender if the portion of the mortgage secured by the SBA exceeds $125,000. For example, the lender is required to obtain a copy of the borrower`s construction contract, which must not exceed a certain price. Approval sets out provisions that must be included in the construction contract with respect to the borrower who requests or accepts significant changes in the plans. If the borrower invests its own funds in the construction project, the lender must prove that it has done so before disbursing the loan funds guaranteed by the SBA. The lender must obtain evidence such as void cheques or paid receipts to ensure that the borrower has used the loan proceeds for the purposes set out in the authorization. Form 1050 also requires lenders to pay the loan proceeds with joint beneficiary cheques, if possible. Lenders must document the injection of equity at the same time as the use of the proceeds – at closing. The lender cannot repay a loan until it has provided proof of a required equity injection. Form SBA 160, Resolution of the Board of Directors (Used to document that a borrowing company authorized the company to enter into the loan commitment and authorized certain officers to sign the documents necessary to bind the company to the bond.) When the U.S. Senate passed the $2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act, the SBA announced it would support $349 billion in loans to help small businesses struggling with COVID-19.
This relief is part of a program called PPP. The SBA offers catastrophe loans for economic damage, not to banks. Small businesses should apply for disaster loans for economic damage, disasterloan.sba.gov/ela/.Traditional loans guaranteed by the SBA are also available. To find an SBA-approved lender, visit www.sba.gov/lendermatch. You must be able to prove that you suffered economic damage as a result of the disaster and that you do not have credit facilities elsewhere. Your credit history will also be reviewed to determine if you qualify. Once you have been approved for the loan and signed the closing documents, your loan funds will be disbursed within five days. If you reduce the number of employees or salaries, the amount of credit rebate you are eligible for decreases.
Each authorization includes prepayment language, which must be inserted in the “Repayment Terms” section of the note as follows: For loans sold on the secondary market – Make sure the initial payment is significantly higher than the amount required to cover the guarantee fee. . . .