SBA Loan Closings

Eligibility determination is the process of evaluating whether a borrower and proposed transaction meet applicable SBA requirements. This review may include the borrower’s business type and size, proposed use of proceeds, affiliation concerns, franchise or licensing relationships, and other program-specific requirements under the applicable SBA SOP.

Eligibility is the foundation of an SBA loan. An issue that is missed early can create challenges later, particularly if the lender is required to demonstrate compliance during a guaranty purchase review. Careful analysis at the outset helps lenders identify potential concerns before significant time and resources are committed to the transaction.

Our firm helps lenders navigate SBA eligibility requirements by reviewing the applicable SOP and related SBA guidance, evaluating affiliation and franchise issues, and addressing transaction-specific eligibility questions. We help lenders identify and resolve potential concerns early so they can move forward with greater confidence.

Loan structuring is the process of developing terms that satisfy both the lender’s credit requirements and applicable SBA requirements. Depending on the transaction, this may include evaluating eligible uses of proceeds, maturity, collateral, equity injection, guaranties, and other program-specific requirements.

A well-structured loan helps ensure that the terms approved by the lender align with SBA requirements. Inconsistencies involving the use of proceeds, collateral, equity injection, or other material terms can create complications during closing or become potential repair concerns if the loan later defaults.

Our firm works with lenders to review proposed loan structures and identify SBA requirements that may affect the transaction. We help reconcile the lender’s credit approval with SBA requirements and address structural issues before they become closing or servicing concerns.

Due diligence is the review of the documents, searches, reports, and other information supporting an SBA loan transaction. Depending on the loan and collateral involved, this may include purchase agreements, leases, title commitments, surveys, environmental reports, lien and background searches, and organizational documents.

Due diligence gives lenders the information needed to evaluate the transaction, confirm collateral requirements, and document compliance with applicable SBA requirements. Identifying issues before closing can help prevent unresolved exceptions from carrying into the final loan file and reduce potential problems if the SBA guaranty is later reviewed.

Our firm reviews transaction-specific due diligence, including third-party reports and entity documents, with SBA compliance in mind. We help identify potential issues, determine what may need to be addressed before closing, and help lenders maintain a complete and defensible loan file.

Loan documentation turns the approved transaction into an enforceable and properly documented loan. This includes preparing and reviewing applicable SBA forms, notes, guaranties, security instruments, lien documents, and other closing documentation so that the documents accurately reflect the approved terms.

Accurate and consistent documentation is critical to protecting the lender and the SBA guaranty. Required forms must be properly used, loan documents should align with the approved terms, and the lender’s file should demonstrate compliance with applicable SBA Loan Program Requirements. Documentation deficiencies can create issues during servicing, liquidation, or guaranty purchase.

Our firm prepares and reviews SBA loan documents and required lien instruments with an emphasis on accuracy, consistency, and SBA compliance. We help lenders assemble a closing package that reflects the approved transaction and supports a clear, organized loan file.

Loan closing is the point at which the transaction comes together. Closing involves confirming that applicable conditions have been satisfied, obtaining properly executed documents, addressing outstanding diligence items, and completing the steps necessary to establish and perfect the lender’s collateral position.

Closing errors can have consequences long after funds are disbursed. Missing documents, incomplete conditions, execution issues, or improperly perfected liens may increase risk to the lender and potentially affect the SBA guaranty. A deliberate closing process helps ensure that required steps are completed and properly documented.

Our firm assists lenders throughout the SBA loan closing process, from reviewing closing conditions and executed documents to coordinating post-closing lien filings. We work with the lender and other transaction parties to resolve issues efficiently and help bring the transaction to a compliant and well-documented close.

Funding and disbursement involve releasing SBA loan proceeds in accordance with the approved transaction. Funds must be used for eligible purposes and supported by appropriate documentation, which may include invoices, settlement statements, evidence of equity injection, and other records demonstrating how proceeds were used.

Proper disbursement is an important component of protecting the SBA guaranty. Lenders must be able to demonstrate that loan proceeds were used as authorized and that required conditions were satisfied before funds were released. Inadequate documentation or improper use of proceeds can create significant issues during a later guaranty purchase review.

Our firm assists lenders with funding and disbursement review as part of the closing and post-closing process. We help confirm that disbursements align with the approved transaction, required documentation is maintained, and potential discrepancies are addressed before they become larger compliance concerns.