The borrower must insure real estate and personal property, including machinery, equipment, furniture, furniture and inventory, which are credit security equivalent to all of its replacement costs. If the borrower is unable to insure the property at its replacement cost, coverage must be made for the maximum insurable value. The insurance policy must provide at least 10 days of written notification to the lender prior to the termination of the policy and contain a CLAUSE MORTGAGEE CLAUSE/LENDER`S LOSS PAYABLE CLAUSE (or equivalent) in favour of Lender and indicate that any act or negligence of the mortgagor or owner or insured property does not invalidate the insurable interest of the lender. It is likely that this requirement does not apply in all cases, for example. B for smaller loans or credits for which no physical guarantee is pledged. Nevertheless, there is an important requirement that contractors should meet. PLP lenders processing their own PLP loans must prepare an authorization at the time the loan is approved. PLP lenders sign the authorization on behalf of the lender and the SBA and then send it to the SBA Commercial Loan Servicing Center. When preparing the authorization, a PLP lender may develop an eligibility condition that has not been previously approved in the boiler plate without SBA authorization, if necessary, for that specified loan, provided the lender has used it only once. The conditions that must be used for a number of credits are subject to SBA approval.
PLP lenders are also allowed to make certain unilateral changes to the authorization that the lender should document by letter of amendment or memorandum in order to create a paper trail with changes ranging from the authorization date to the end date. Other lenders must obtain the approval of the SBA to amend the authorization. The lender is not allowed to pay the funds for the sole payment of the guarantee commission. The lender may only pay working capital for funds that are not spent for the purposes expressly mentioned in the authorization, if those funds do not exceed 10% of those specific targets, or $10,000, something less depending on the measures. The CBE must not receive working capital. The SBA has minimized the number of standard SBA loan forms a lender must use, so that the lender has maximum flexibility to close its loans efficiently and economically. However, SBA offers a number of standard forms that a lender may use at its sole discretion if the lender or its lawyer believes that these forms are legally sufficient under current state law. These forms include: the lender must keep the signed SBA 1050 form, billing forms, as well as any other documents that support the borrower`s use of the loan proceeds. If the lender then requires SBA to purchase the secured portion of the loan, it must provide complete documentation in which the proceeds of the loan were used as approved. Upon receipt of the IRS transcript, the lender must compare it to the financial statements submitted by the borrower prior to payment.
In the event of a significant discrepancy, the lender must notify the SBA and not distribute the proceeds of the loan until the spread has been corrected. In this case, the lender may inform the applicant that the SBA has suspended the payment while considering an adverse change, but that the lender does not specifically refer to the IRS audit. SBA may deny responsibility for its guarantee to any lender who pays the product before receiving a response (or after receiving a response, but before a disparity is corrected). Fixed-rate loans – Insert the real fixed interest rate, z.B”10%” The authorization must include an additional in advance fee called a “subsidy repayment fee.” This fee is abolished if the borrower voluntarily makes a loan in advance; The amount of the advance is more than 25% of the loan balance; and the advance is made within 3 years of the first (unauthorized) payment of the loan proceeds.