Assuming the lender is familiar with the loan and has obtained permission from the SBA, the final step is the documentation and completion of the loan transfer. This package of documents varies in complexity to effectively cover the amount of a given loan, but the core will almost always include an assignment and acquisition agreement, a separate note from Allonge to Promissory, and separate assignment/acquisition documents for loan documents describing such as mortgages and rent assignments. The parties should also work together to amend all UCC financing statements to modify the secured portion in the borrowing lender. If the lender is satisfied with the credit report, the next step is to obtain authorization from the SBA for the transfer. The transfer of a lender`s shares in a 7(a) loan may not be made without the prior written consent of the SBA. SBA authorization is requested by filing the SBA Transfer of Participation Agreement with the SBA Loan Service Center. This form identifies the loan to be transferred, is signed by both the transferring lender and the abdicating lender, and requires a narrative for certain questions, including: if the loan was sold on the secondary market, the transferring lender and the abdicating lender should inform the tax transfer agent (FTA) with the transfer. Alternatively, the assigning lender and the abdating lender may execute an assignment and acquisition agreement prior to the filing of the assignment agreement. When the parties choose this order, they should ensure that the assignment and takeover agreement contains a provision stipulating that the transfer of the loan must be submitted to the SBA for written approval. Has the borrower requested the transfer? Was the credit sold on the secondary market? What is the purpose of the transmission? How does the transfer benefit the borrower? Once the abdicating lender has confirmed that the transferring lender is ready to transfer, the next step will be for the transferee lender to review the loan file, in particular with regard to the initial use of the proceeds, the adequacy and analysis of the credit, the priority of any pledge rights and whether the loan was properly concluded and properly served; Careful. In essence, the abdicating lender should independently verify whether the SBA guarantee exists and whether he is otherwise satisfied with the status of the loan. Lenders should verify the SOP 50 10 in effect at the time of the granting of the credit to ensure that the applicable requirements of the credit program have been met, including those relating to assessments, environmental studies and Form SBA 912 (Personnel History Statement). The purchase lender should at the same time document its analysis in its internal credit memorandum.
The first step for any lender considering taking over an existing 7(a) loan is to confirm that the transferring lender authorizes the transfer. A lender 7 (a) cannot be compelled to assign its interest on a loan, even if the borrower requests it. The transfer of a 7(a) loan can only be made on a voluntary basis. The parties should also agree on the basic terms of the assignment (including the purchase price) before going too far. A memorandum of understanding or loan agreement can be used to reflect the terms of the sale. Admittedly, this article is not intended to constitute a complete checklist of reflection in SBA 7 (a) credit transfers, but rather to provide a basic framework for transactions and implications for lenders, which will be analyzed by the credit transfer process. We have learned more and more from lenders that the SBA has strongly considered refinancing an existing SBA 7(a) loan with a new 7(a) loan.. .