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(May 16) - SBA releases new Form 1050

The Form 1050 may be used for all 7(a) loans and for all disbursements; it MUST be used for the first disbursement on all standard 7(a) loans over $350,000. Lenders complete the form, which must be signed by both the lender & the borrower at the time of the initial loan disbursement. A copy of the signed Form 1050 MUST be retained in the lender's loan file. For all disbursements, the "Lender must also retain documentation that is acceptable to SBA (such as joint payee checks, cancelled checks, paid receipts or invoices, wire transfer account records, etc.) and that evidences compliance with the Use of Proceeds section of the Authorization."

NOTE: Lenders must submit the completed form and all supporting documentation to SBA upon request, or, in the event of a loan default, with the s request for guaranty purchase. "Providing this information is required to comply with program requirements; failure to provide it when required may impair the Lender’s ability to collect on the SBA loan guaranty."

Notice 5000-19010 announces availability of new Form 1050 >


Congratulations to NAGGL's 2019 Champions of Small Business Entrepreneurship: BrewHound Dog Park + Bar in Neptune Beach, FL. Customers of Florida Capital Bank, Lauren Wyckoff & Jason Underwood share their 7(a) loan success story:

 




Notice 5000-19009, Updates procedures in 50 57 2, Approval of certain Servicing Actions

By Procedural Notice 5000-19009, SBA announced that it amended its delegated authority requirements as contained in SOP 50 57 2, 7(a) Loan Servicing and Liquidation to match the recent change in SOP 50 10 5(K).  (We are awaiting the publication of a new version of the Matrix (ver. 15) that will also reflect this change.) Under the amended policy, for a period of 12 months after final disbursement, SBA does not permit any lender to unilaterally approve any adjustments to or changes in the ownership of a Borrower, including a change in percentage of ownership.  During this one-year period, the lender must send any request for a change of ownership, together with its rationale for recommending approval of the change, to the appropriate Commercial Loan Servicing Center (CLSC) for SBA’s prior approval.  As part of its determination, the CLSC will verify that the proposed ownership change complies with limitations on the aggregate amount of SBA portions of all loans outstanding to the same borrower and any affiliates; and that there has been no prior loss to the government caused by the new owner(s).  


Will fee fight cause another SBA shutdown? House SBC asks GAO to study math behind SBA's subsidy request
(May 7) - ABA - Lawmakers from both parties are turning up the heat on the Small Business Administration over the agency's proposal to hike fees on small businesses.

April 10 - SBA 7(a) Budget Proposal and the Impact of Fee Structure Changes

NAGGL president and CEO Tony Wilkinson testified. Watch a recording of the hearing >

Hearing Memo >

Testimony of Tim Gribben (SBA) >

Testimony of Tony Wilkinson (NAGGL) >

Testimony of Lynn G. Ozer (Fulton Bank) >

Testimony of Gail Jansen (Kinecta FCU) >

Testimony of Gordon Gray (American Action Forum) >


President's FY20 budget request presents shocking positive subsidy with serious ramifications for the 7(a) program; NAGGL calls on Congress to challenge it

In the President's FY20 budget request released on Monday March 18, SBA announced a positive subsidy for the 7(a) program of 33 basis points, or $99 million.  This is a major shift from the program’s track record of operating at zero subsidy.  Absent an amendment to the subsidy calculation from SBA, before October 1, Congress must either appropriate $99 million to fund the program or raise fees on borrowers and lenders to cover the $99 million cost of the program -- or the program will shut down.  The real problem?  The positive subsidy calculation does not seem to make sense considering the portfolio's performance metrics and a history of SBA overcharging borrowers and lenders to the tune of $3.2 billion over the last eight fiscal years.  NAGGL is on top of the issue, engaging Congress and challenging the subsidy calculation.  Read more on this critical issue >

 

 

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MAY RATES

Prime Rate = 5.50%

Fixed Interest Rate Base = Prime [+ allowable spreads]

Federal Register Notice (11/2018) >
Maximum Allowable Fixed Rates >

SBA LIBOR Base Rate = 5.48%
History of SBA LIBOR base rate >

SBA Optional Peg Rate = 2.88% [April 1-June 30, 2019]
[SOP 50 10 5, "Base Rates will be rounded to two digits with .004 being rounded down and .005 being rounded up."]


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6/5/2019 » 6/6/2019
Cincinnati Area - Closing and Funding the SBA Loan

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