The SBA 7(a) and 504 loan programs are different, but the roadmap which governs how to close a transaction is in the context of the SBA authorization.
The authorization is a document issued by or on behalf of SBA to set forth loan requirements, which should match credit requirements. It also sets forth required loan conditions and collateral requirements and must be followed strictly. A national authorization sets forth state specific requirements. With 7(a) program the authorization is signed by the particular lending official for delegated loans and by the SBA if it’s a non-delegated loan. 504 loans are signed for by the CDC and the borrower. Watch this video for details on title requirements, property business approvals, formation documents and more.
Thomas L. Hofstetter
Schenck, Price, Smith & King LLP
- Principal at Schenck, Price, Smith & King LLP in Florham Park, New Jersey, chair of the firm’s Banking Practice Group and member of Workout Restructuring Practice Group and Corporate Law Group
- Practice focuses on representing commercial lenders in loan transactions and other commercial matters
- Experience crosses a broad spectrum of lending areas, including real estate and asset-based secured loans, construction loans, foreclosures and loan workout arrangements
- Member of the National Association of Government Guaranteed Lenders (NAGGL) 7(a) Trade Origination serving as chair of Region II Regional Liaison Committee, member of Technical Issues Committee and instructor for the organization
- Member 504 National Association of Development Companies (NADCO) 504 Trade Organization
- Regularly presents in person and online seminars, and conducts training sessions for clients regarding all aspects of closing commercial loans and SBA loans, including annual updates on the SBA SOPs
- Represents several national and community lenders with regard to 7(a) and 504 loans, designated counsel for several 504 Certified Development Companies (CDC)
- Former general counsel of a community bank and section chief for the Federal Deposit Insurance Corporation
- Can be contacted at 973-540-7308 or [email protected]
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