Complimentary Coleman Report Live!

Transcription

1 Complimentary Coleman Report Live! Featuring Bob Coleman & Beth Solomon 11:50-12:00 PM E.T. Log on 10 minutes early before every Coleman webinar for a briefing on issues vital to the small business lending industry with your hosts: Bob Coleman, Editor of the Coleman Report Beth Solomon, President, NADCO 1

2 SBA 504 PROGRAM CHANGES TO THE SOP 5010 Coleman Webinar November 21, 2013

3 How to Ask Questions Use Go to Meeting's chat function, you can choose to ask question in writing or verbally. If comfortable, give us your first name, name of bank, and city. Send an to

4 Certificates of Participation All Coleman Webinar attendees will receive a certificate of participation. This documents your continuing education history for your regulators. Also, this documents the answer for SBA s Review question of continuing staff education. We will automatically forward a certificate of participation for those who are registered to attend the webinar via GoToWebinar. If you have purchased the unlimited site license and would like certificates for all who attend simply forward their names and addresses to jeanne@colemanreport.com. She will the certificates to all attendees.

5 504 SOP (F) Changes Critical Points for Program Participants

6 Overview SOP (F) has an effective date of 1 January 2014 Loans process until then under SOP (E) Pending Final Rule changes will have impact: affiliation, i personal resources test, "nine month rule", and CDC governance; at some point...(federal lregister Vl Volume 78, No. 37 pages , 25 February 2013)

7 Documentation SBANotice Fees SBA Notice SBA's Highlights Full lllist of 504 related changes New 912 Form...Personal History New SBA Form Religious Eligibility OMBCircular IR/DB IR/DBissues

8 Key Issues & Changes Affiliate & Guarantor a CBR requirements e e LOI/Commitment Letter/Term Sheet Local & State tax exempt IR/DB clarification Franchise Issues Eligibility Clarifications "Green" Projects Loan Agents CDC World

9 Affiliate & Guarantor a CBR Requirements e e CBRs required on SBC applicant, principals; & affiliates who are guarantors Who is excluded? How is global cash flow determined & verified by a prudent lender? Impact of Final Rule regarding affiliation...what does a prudent lender do?

10 LOI/Commitment O/Co tletter/term e Sheet Whenever possible use a commitment letter as full disclosure of all loan terms in formal notice to both SBA & CDC prevents a preference issue Notify CDC via recorded format of changes to collateral or guarantor positions, which could be interpreted as a preference

11 Local & State tax ee exempt IR/DB Ca Clarification cato Underused avenue withconsiderable utility for community banks Extremely localized Local SBA District Counsel is more critical due to local lissues and interpretation i

12 Franchise Issues Acceptable vs. Eligible in reviews of Agreements Master Franchise Agreements are problematic Area Development Agreements are less so Impact of "Green" see later discussion

13 Eligibility gb tyca Clarifications cato Financial Advisors Change of Ownership New 912 Sexual prurience Prior loss to govenrment Long term Permanent Resident Permissible refinance

14 "Green" Gee Projects Potentiallythemostinteresting the interesting change Significant new markets open, middle market in size and credit complexity Franchise applicability?

15 Loan Agents No major changes, but... OIG has a long memory, mid Atlantic issues SBA has a tradition i of looking at agents rather than rogue lenders Expect greater focus

16 CDC CWorld Await the final rule Federal Register Governance Capability Capacity Fees and the return of 504 Refinance

17 Long Term Implications 504 will be increasingly viewed as economic development: impact vs. cost, rather than support of SBCs Larger more complex credits will come to the fore, will underwriting at both CDCs and SLPC keep pace? If underwriting i pace is upheld, hldcredit quality may improve significantly, impact for fees?