Consumer Deposit Consumer Lending Real Estate Lending Business Services Small Business Lending Documents User Guide P.O. Box 391 5910 Mineral Point Road Madison, WI 53701-0391 Email: loanliner@cunamutual.com MBUG37 CUNA Mutual Group 2013 All Rights Reserved
Disclaimer This guide is distributed to provide general information about the subject matter covered. It should not be substituted for professional advice in specific situations. CUNA Mutual Group does not represent or warrant the fitness or suitability of any LOANLINER Business Lending document for any specific purpose. Competent business lending personnel with experience in making the type of business loans that will be documented with these forms should thoroughly review each loan document and determine its suitability for use for a specific loan transaction. In addition, all documents should be thoroughly reviewed to identify any inconsistencies with your credit union s policies and procedures. CUNA Mutual Group cannot provide legal advice. If you have questions related to specific loan transactions, please consult your attorney.
Contents Introduction 1 Chapter 1: Business Application 3 Chapter 2: Business Expanded Application 8 Chapter 3: Business Credit and Continuing Security Agreement 15 Chapter 4: Business Credit Agreement Rider 26 Chapter 5: Business Loan Receipt 31 Chapter 6: Consent of Landlord 36 Chapter 7: UCC1 Financing Statement & Addendum 39 Chapter 8: UCC3 Financing Statement Amendment 44 Chapter 9: Business Credit Card Agreement and Addendum 48
Introduction Welcome to the Small Business Lending User Guide. To enable you to take care of most of your business lending needs, LOANLINER Systems has developed three business packages, one for non-real estate secured loans, one for real estate secured loans and one for business deposit. The lending packages will share the Business Adverse Action Notice, the Business Guaranty Agreement, and the Authorization Designation documents. Instruction for the shared documents will be provided in the Miscellaneous Business Lending User Guide. This User Guide will help you process the documents needed for business lending that is not secured by real estate. These documents include: Business Application Business Expanded Application Business Credit and Continuing Security Agreement Business Credit Agreement Rider Business Loan Receipt Consent of Landlord Uniform Commercial Code Financing Statement & Addendum (UCC1) Uniform Commercial Code Financing Statement Amendment (UCC3) Now you can create a cost-effective loan processing system that s tailored to meet the needs of your credit union. LOANLINER s Business Lending documents were designed to reduce the paperwork for you and your borrowers. LOANLINER s Business Lending documents have been designed for compatibility with most data processors hardware and software. LOANLINER s Business Credit and Continuing Security Agreement simplifies and speeds up the lending process, giving you an important tool to build borrower relationships. All documents are written in clear, straightforward language, and are easy to use and understand. With LOANLINER documents you can rest assured that every document when completed in accordance with the instructions provided in this guide is compliant with federal and state regulations and standards. Uniform Commercial Code Financing Statement Amendment (UCC3) The LOANLINER program has been part of credit unions lending success for two decades and is currently being used by nearly 7,000 credit unions. Our work with these credit unions has helped us develop a high degree of lending expertise. You will have direct access to this expertise via any of the channels described below. Lending Resource Center. The Lending Resource Center offers a comprehensive and timely way to stay on top of key lending and compliance issues and a variety of resources to improve your lending performance, available at your fingertips 24/7. Key resources include: compliance alerts with action steps; training and operational needs; credit union best practices; lender tutorial; product news and updates; featured questions and answers; and optional email notification of newly published alerts and articles. The Lending Resource Center is available only to credit unions using LOANLINER Lending or Deposit documents; or credit unions that offer one or more of the following CUNA Mutual Group products: credit disability insurance, credit life insurance, debt cancellation, guaranteed asset protection, mechanical repair coverage. To request access, go to www.cunamutual.com\lendingresourcecenter. 1 Small Business Lending Documents User Guide
LOANLINER Business Document User Guides. We strongly recommend that all credit unions review the LOANLINER Business Documents User Guides for important document usage information and state specific language that is recommended for certain loan documents. These User Guides can be found in the LOANLINER Lending Resource Center: Business Real Estate Secured Lending Documents User Guide Miscellaneous Business Lending Document User Guide Business Deposit Document User Guide LOANLINER Customer Service. Providing you with assistance in selecting and ordering documents, checking the status of your order, or billing questions. Call 800.356.5012 or e-mail loanliner@cunamutual.com. Compliance Alerts. Stay informed about compliance and regulation changes. For recent compliance updates, go to www.loanliner.com and click on Lending Resource Center. LOANLINER Compliance Support. Providing you with assistance in selecting documents as well as answers to your compliance and document usage questions. Call 800.356.5012 or e-mail loanliner@cunamutual.com. Your CUNA Mutual Group Representative. Call your CUNA Mutual Group account representative at 800.333.2644 for more information. Using this Guide This User Guide provides the basics on how to use the LOANLINER Small Business Lending documents. You can download a current User Guide from the LOANLINER Lending Resource Center. This User Guide is intended to be used as: A learning tool to learn the LOANLINER Business Lending program. A reference tool once you begin using the documents on a regular basis. A set of instructions for modifying certain documents with state specific notice requirements. If you need detailed assistance, you can rely on your local CUNA Mutual Group representative or the LOANLINER staff for expert help on using any of the Business Lending Documents. The User Guide was designed to make it easy for you to reference each document. Each chapter provides the following information: Document description Document sample Document instructions 2 Small Business Lending Documents User Guide
Chapter 1: Business Application The Business Application is a simple generic two-page loan application used to collect basic loan application data from the loan applicant(s) and guarantor(s), document the request for a business loan, and support internal credit underwriting policies. It is designed for loans involving smaller businesses and less complex loan transactions. The document provides a way for the Credit Union to collect required data about the applicant (e.g., names, addresses, credit history) and the loan transaction (e.g., loan amount, loan purpose). The information contained on the application along with other underwriting tools at the Credit Union will be used to evaluate the credit worthiness of applicant(s), as well as assess the ability to repay each loan advance. Document Description When used: Purpose: Document number: How distributed: Imprinting: Number of pages: State-specific versions: This document, the first completed during the loan transaction, is used whenever an applicant wants to initiate a business loan, when the applicant s relationship has been established and when the loan is relatively simple. It is used if the Credit Union does not have a comparable document. Data collected from the document is used to evaluate the applicant s creditworthiness and serves to document the request for a specific loan purpose and amount. It collects pertinent information relative to the applicant(s) present financial condition, credit history and personal and business information in order to establish a business relationship between the applicant(s) and the Credit Union. AXB10* This document is kept with your credit union s file. This document allows an imprint of your credit union s name, address, phone number and logo. If the imprinting option is not selected, be sure to add your credit union name while processing the document. Two None *Indicates spaceholder for version number 3 Small Business Lending Documents User Guide
Page one sample Use the numbers provided to locate the corresponding instructions on the next page. 1 DBA NAME(S) IMPORTANT INFORMATION ABOUT PROCEDURES FOR APPLYING FOR A LOAN Business - Application To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify, and record information that identifies each person or business that opens an account. What this means for you: When you open an account, we will ask for your name, address, date of birth, if applicable, and other information that will allow us to identify you. We may also ask to see your driver's license or other identifying documents. Married Applicants may apply for a separate account. 2 LOAN REQUEST Member/Account Number: Application Type: New Renewal/Change Other: Type of Credit: Individual/Business Joint (Co-Applicant must individually complete Co-Applicant Information) Amount requested: $ Terms/Maturity: Type: Line of Credit Term Loan Credit Card Commercial Real Estate Other: Purpose of Loan: 3 LOAN SECURITY Collateral Description: Value: Liens/Security Interest and State Filed: Subject Property Address (street, city, state, and zip): 4 APPLICANT/INDIVIDUAL INFORMATION BUSINESS/INDIVIDUAL NAME YEAR BUSINESS ESTABLISHED STATE PRIOR BUSINESS NAME(S) CONTACT NAME TITLE TELEPHONE TYPE OF ORGANIZATION: INDIVIDUAL PROPRIETORSHIP PARTNERSHIP CORPORATION LLC ASSOCIATION NON-PROFIT OTHER: IF INDIVIDUAL, PROVIDE THE FOLLOWING INFORMATION: EMPLOYER NAME: EMPLOYER TELEPHONE NUMBER SSN/TIN NUMBER DRIVER'S LICENSE NUMBER/STATE ISSUANCE DATE EXPIRATION DATE DATE OF BIRTH HOME TELEPHONE WORK TELEPHONE CELL PHONE FAX NUMBER WEB SITE ADDRESS/EMAIL PHYSICAL ADDRESS MAILING ADDRESS 5 COMPLETE FOR JOINT CREDIT, SECURED CREDIT OR IF YOU LIVE IN A COMMUNITY PROPERTY STATE: ID VERIFICATION: MARRIED SEPARATED UNMARRIED (Single - Divorced - Widowed) GUARANTOR/CO-APPLICANT 1. I AM PROVIDING THE FOLLOWING INFORMATION FOR PURPOSES OF SERVING AS A (CHECK ONE): SSN/TIN NUMBER DATE OF BIRTH GUARANTOR CO-APPLICANT NAME DRIVER'S LICENSE NUMBER/STATE ISSUANCE DATE EXPIRATION DATE HOME TELEPHONE WORK TELEPHONE CELL PHONE FAX NUMBER WEB SITE ADDRESS/EMAIL PHYSICAL ADDRESS MAILING ADDRESS COMPLETE FOR JOINT CREDIT, SECURED CREDIT OR IF YOU LIVE IN A COMMUNITY PROPERTY STATE: ID VERIFICATION: MARRIED SEPARATED UNMARRIED (Single - Divorced - Widowed) 2. I AM PROVIDING THE FOLLOWING INFORMATION FOR PURPOSES OF SERVING AS A (CHECK ONE): SSN/TIN NUMBER DATE OF BIRTH GUARANTOR CO-APPLICANT NAME DRIVER'S LICENSE NUMBER/STATE ISSUANCE DATE EXPIRATION DATE HOME TELEPHONE WORK TELEPHONE CELL PHONE FAX NUMBER WEB SITE ADDRESS/EMAIL PHYSICAL ADDRESS MAILING ADDRESS COMPLETE FOR JOINT CREDIT, SECURED CREDIT OR IF YOU LIVE IN A COMMUNITY PROPERTY STATE: ID VERIFICATION: MARRIED SEPARATED UNMARRIED (Single - Divorced - Widowed) or CHECK IF ADDITIONAL GUARANTOR/CO-APPLICANT INFORMATION ACCOMPANIES THIS APPLICATION. CUNA Mutual Group 2004, 06 All Rights Reserved AXB103-e 4 Small Business Lending Documents User Guide
Page one instructions Instructions are given for each section of the document. Please refer to the corresponding number on the sample document to determine each section s relative position on the document. 1. Read important information. This section discloses to the applicant what type of personal information must be collected. This disclosure complies with USA Patriot Act notice requirements. 2. Make loan request. This section collects information from the applicant to determine: The type of business and type of credit The amount requested and the terms/maturity of the loan The type of loan and the purpose of the loan 3. Provide loan security. This section collects information from the applicant to determine: The description of the collateral and the value of the collateral If the collateral already has a lien against it for another loan and the location of the collateral 4. Provide applicant information. This section collects information from the applicant (ID verification is determined by the Credit Union): The name of the business or individual and when the business was established Where the business is located (what state) and what other/prior names are/were used by the business Who is the business contact and the contact s title and phone number The type of organization The applicant s personal information, if the applicant is an individual including: SSN/TIN number, driver s license and state, issuance date, expiration date, date of birth, home telephone, work telephone, cell phone, fax number, web site address/email, physical address, and mailing address The marital status if the applicant is an individual Record applicant s identification verification. Examples of applicant records to identify and verify include driver s license, passport, and corporate identification badge 5. Provide guarantor/co-applicant information. This section collects information from the guarantor or co-applicant. The document provides two sets of fields for collecting information from more than one guarantor or co-applicant. If more than two parties are involved as guarantor or co-applicant, an additional application should be used. Some community property states may require the co-applicant section to be completed. Check with your own attorney for guidance. If the information for an item in the Guarantor/Co-applicant section is the same as the information for the same item in the Applicant section, complete the item by filling in SAA ( Same as applicant ). 5 Small Business Lending Documents User Guide
Page two sample Use the numbers provided to locate the corresponding instructions on the next page. 6 7 SOURCES OF INCOME Important Notice to Individuals ALIMONY-CHILD SUPPORT: The inclusion of alimony, separate maintenance, or child support as income is voluntary and need not be revealed if you do not wish to have it considered in evaluating this application. GROSS ANNUAL INCOME NET SALES BASE SALARY OVERTIME BONUS AND/OR COMMISSIONS DIVIDENDS/INTEREST NET RENTAL INCOME ITEMIZED OTHER: 1. 2. 3. 4. 5. TOTAL ANNUAL INCOME APPLICANT FINANCIAL INFORMATION GUARANTOR OR CO-APPLICANT #1 GUARANTOR OR CO-APPLICANT #2 TOTAL SPOUSE (IF APPLICABLE) Please include copies of the following checked items as attachments to this application: Federal Tax Return For: Balance Sheet for Current Year for: Borrower Guarantor/Co-Applicant(s) Current Year Other: Income Statement for Current Year: Borrower Guarantor/Co-Applicant(s) Borrower Guarantor/Co-Applicant(s) Other: Borrower Guarantor/Co-Applicant(s) Financial Services Accounts Information: Checking Loan(s) Borrower Guarantor/Co-Applicant(s) Number Attached Borrower Guarantor/Co-Applicant(s) Number Attached Savings Borrower Guarantor/Co-Applicant(s) Number Attached Other: Borrower Guarantor/Co-Applicant(s) Number Attached Check if additional account information accompanies this application. STATE LAW NOTICES OHIO RESIDENTS ONLY: The Ohio laws WISCONSIN RESIDENTS ONLY: Please sign if you are not applying for this 8 against discrimination require that all creditors account or loan with your spouse. The credit being applied for, if granted, will make credit equally available to all creditworthy customers, and that credit be incurred in the interest of the marriage or family of the undersigned. reporting agencies maintain separate credit histories on each individual upon request. The Ohio Civil Rights Commission administers compliance with this law. X SIGNATURE FOR WISCONSIN RESIDENTS ONLY DATE 9 SIGNATURES You promise that everything you have stated in this application is correct to the best of your knowledge and that the above information is a complete listing of what you owe. If there are any important changes you will notify us in writing immediately. You authorize the Credit Union to obtain credit reports in connection with this application for credit and for any update, increase, renewal, extension or collection of the credit received. You understand that the Credit Union will rely on the information in this application and your credit report to make its decision. You agree that requested documentation that accompanies this application is complete and correct and that it's incorporated as part of this application. If you request, the Credit Union will tell you the name and address of any credit bureau from which it received a credit report on you. It is a crime to willfully and deliberately provide incomplete or incorrect information in this application. By: X TITLE: BORROWER CO-APPLICANT GUARANTOR X DATE By: BORROWER CO-APPLICANT GUARANTOR DATE TITLE: 10 VERIFICATION COMPLETION DATE BY The person(s) signing the application is/are indeed authorized to act on behalf of the borrower. Borrower, co-applicant(s), and guarantor(s), as appropriate grants to the credit union the authority to use reasonable means to verify application information by requesting credit bureau reports, accessing information about borrower, co-applicant(s), and guarantor(s), as appropriate from other third party information providers, and other means if applicable. Borrower further grants to credit union the right to share this information with third parties as reasonable in the normal course of doing commercial lending including sharing this information with a third party for purposes of underwriting the loan. Borrower agrees to pay any fees charged by the credit union for processing this application and other related expenses whether the application is approved or denied. You promise that the credit you are applying for is for a business purpose. By signing below or by using your card, you understand that either of those actions will constitute acknowledgment of receipt and agreement to the terms of the credit card agreement and disclosures. X By: BORROWER CO-APPLICANT GUARANTOR DATE TITLE: X By: BORROWER CO-APPLICANT GUARANTOR DATE TITLE: FOR CREDIT UNION USE ONLY GOVERNMENT LIST(S) CHECKED: TREASURY CIP LIST OFAC OTHER: LIST VERIFICATION COMPLETION DATE BY DATE APPROVED APPROVED SIGNATURE LIMITS: LINE OF CREDIT CREDIT CARD OTHER OTHER DENIED (Adverse Action Notice Sent) $ $ $ $ $ LOAN OFFICER COMMENTS: SIGNATURES: X DATE X DATE AXB103-e 6 Small Business Lending Documents User Guide
Page two instructions Instructions are given for each section of the document. Please refer to the corresponding number on the sample document to determine each section s relative position on the document. 6. Record sources of income. This section collects information from the applicant, the guarantor/ co-applicant and spouse regarding annual income from the following sources: Net sales and base salary Overtime, bonus and/or commissions Dividends/interest and net rental income Other income 7. Record financial information. This section collects information from the applicant and sometimes guarantor/co-applicant as specified by credit union underwriting policies. For each box checked by the Credit Union, the applicant will attach copies of the requested documents to the application. Financial information that may be requested include: Federal tax return for current or past year(s) and balance sheet for current year Income statement for current year Checking account, savings account and loans (account number, institution name, and balance) 8. Read state notices. This section discloses to applicants living in Ohio and Wisconsin the following state specific information: Ohio law specifies that all creditors make credit equally available to all creditworthy customers, and that credit reporting agencies maintain and provide separate credit histories on each individual upon request. In Wisconsin the applicant should sign if he or she is not applying for this account or loan with his/her spouse. 9. Record signatures. This section collects signatures from the applicant and any guarantor/co-applicant. All applicants or guarantors should sign and date the application. By signing the applicant, co-applicant, and guarantor agree to the terms written in the signature section. 10. Reserved for credit union use. This section is for the Credit Union to use to document the request and other processing information according to credit union policy associated with its identity processes and procedures. 7 Small Business Lending Documents User Guide
Chapter 2: Business Expanded Application The Business Expanded Application is a comprehensive three-page loan application used to collect data on the loan applicant(s) and guarantor(s), document the request for a business loan, and support internal credit underwriting policies for a more complicated type of business and/or business loan where more detailed information on the applicant would be helpful. The document provides a way for the Credit Union to collect required data about the applicant (e.g., names, addresses, credit history), plus details concerning the applicant s attorney, accountant, insurance coverage, and franchise information, if applicable. The information contained on the application can be used with other underwriting tools at the Credit Union to evaluate the creditworthiness of the applicant(s) as well as assess his/her ability to repay each loan advance. Document Description When used: Purpose: Document number: How distributed: Imprinting: Number of pages: State-specific versions: This document, the first completed during the loan transaction, is used instead of the simple application whenever a applicant wants to initiate a business loan and when the applicant relationship is new and/or the loan is relatively complex or when the Credit Union s credit policies require more information about the applicant. It is used if the Credit Union does not have a comparable document. It is used for loans not secured by real estate. Data collected from the document is used to evaluate the applicant s creditworthiness and serves to document the request for a specific loan purpose and amount. It collects pertinent information relative to the applicant(s) present financial condition, credit history, personal and business information in order to establish a business relationship between the applicant and the Credit Union. AXB20* The document is kept with your credit union s file. This document allows an imprint of your credit union s name, address, phone number and logo. If the imprinting option is not selected, be sure to add your credit union name while processing the document. Three None *Indicates spaceholder for version number 8 Small Business Lending Documents User Guide
Page one sample Use the numbers provided to locate the corresponding instructions on the next page. Business - Expanded Application 1 IMPORTANT INFORMATION ABOUT PROCEDURES FOR APPLYING FOR A LOAN To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify, and record information that identifies each person or business that opens an account. What this means for you: When you open an account, we will ask for your name, address, date of birth, if applicable, and other information that will allow us to identify you. We may also ask to see your driver's license or other identifying documents. Married Applicants may apply for a separate account. 2 LOAN REQUEST Member/Account Number: Application Type: New Renewal/Change Other: Type of Application: Individual/Business Joint (Co-Applicant must individually complete Co-Applicant Information) Amount requested: $ Terms/Maturity: Type: Line of Credit Term Loan Credit Card Commercial Real Estate Other: Purpose of Loan: 3 LOAN SECURITY Collateral Description: Value: Liens/Security Interest and State Filed: Subject Property Address (street, city, state, and zip): Collateral Owner (if not borrower): Legal Description of Subject Property: Number of Units: Year Built: Assessed Value: Life Insurance Policy #: Coverage Amount: Insurance Agent: Telephone Number: 4 APPLICANT/INDIVIDUAL INFORMATION BUSINESS/INDIVIDUAL NAME YEAR BUSINESS ESTABLISHED STATE BUSINESS LICENSE NUMBER ISSUANCE DATE EXPIRATION DATE STATE ISSUED NATURE OF BUSINESS OTHER STATES OPERATING IN DBA NAME(S) PRIOR BUSINESS NAME(S) CONTACT NAME TITLE TELEPHONE TYPE OF ORGANIZATION: INDIVIDUAL PROPRIETORSHIP PARTNERSHIP CORPORATION LLC ASSOCIATION NON-PROFIT OTHER: IF INDIVIDUAL, PROVIDE THE FOLLOWING INFORMATION: EMPLOYER NAME EMPLOYER TELEPHONE NUMBER EMPLOYER ADDRESS TITLE/GRADE START DATE SSN/TIN/EIN NUMBER DRIVER'S LICENSE NUMBER/STATE ISSUANCE DATE EXPIRATION DATE DATE OF BIRTH HOME TELEPHONE WORK TELEPHONE CELL PHONE FAX NUMBER WEB SITE ADDRESS/EMAIL PHYSICAL ADDRESS MAILING ADDRESS OWN LEASE OTHER COMPLETE FOR JOINT CREDIT, SECURED CREDIT OR IF YOU LIVE IN A COMMUNITY PROPERTY STATE: MARRIED SEPARATED UNMARRIED (Single - Divorced - Widowed) ID VERIFICATION: NAME FRANCHISE INFORMATION ADDRESS TELEPHONE NUMBER CONTACT NAME OWNERSHIP/COMPANY OFFICER INFORMATION: NAME TITLE NUMBER OF YEARS OWNERSHIP PERCENTAGE SSN/TIN NUMBER CHECK IF ADDITIONAL OWNERSHIP INFORMATION ACCOMPANIES THIS APPLICATION. CUNA Mutual Group 2004, 06 All Rights Reserved AXB203-e 9 Small Business Lending Documents User Guide
Page one instructions Instructions are given for each section of the document. Please refer to the corresponding number on the sample document to determine each section s relative position on the document. 1. Read important information. This section discloses to the applicant what type of personal information must be collected. This disclosure complies with USA Patriot Act notice requirements. 2. Make loan request. This section collects information from the applicant to determine: The type of business and type of credit The amount requested and the terms/maturity of the loan The type of loan and the purpose of the loan 3. Provide loan security. This section collects information from the applicant to determine: The description of the collateral and the value of the collateral If the collateral already has a lien against it for another loan and the location of the collateral 4. Provide applicant information. This section collects information from the applicant (ID verification is determined by the Credit Union): The name of the business or individual and when and where the business was established Where the business is located (what state) and what other/prior names are/were used by the business The name of the business contact, title and phone number The type of organization The applicant s personal information, if the applicant is an individual including: SSN/TIN number, driver s license and state, issuance date, expiration date, date of birth, home telephone, work telephone, cell phone, fax number, web site address/email, physical address, and mailing address The marital status if the applicant is an individual Record applicant s identification verification. Examples of applicant records to identify and verify include driver s license, passport, and corporate identification badge 10 Small Business Lending Documents User Guide
Page two sample Use the numbers provided to locate the corresponding instructions on the next page. 5 GUARANTOR/CO-APPLICANT 1. I AM PROVIDING THE FOLLOWING INFORMATION FOR PURPOSES OF SERVING AS A (CHECK ONE): SSN/TIN NUMBER DATE OF BIRTH GUARANTOR CO-APPLICANT NAME DRIVER'S LICENSE NUMBER/STATE ISSUANCE DATE EXPIRATION DATE HOME TELEPHONE WORK TELEPHONE CELL PHONE FAX NUMBER WEB SITE ADDRESS/EMAIL PHYSICAL ADDRESS MAILING ADDRESS GUARANTOR/CO-MAKER ON OTHER LOANS (Lender name, term, and amount) COMPLETE FOR JOINT CREDIT, SECURED CREDIT OR IF YOU LIVE IN A COMMUNITY PROPERTY STATE: ID VERIFICATION: MARRIED SEPARATED UNMARRIED (Single - Divorced - Widowed) 2. I AM PROVIDING THE FOLLOWING INFORMATION FOR PURPOSES OF SERVING AS A (CHECK ONE): SSN/TIN NUMBER DATE OF BIRTH GUARANTOR CO-APPLICANT NAME DRIVER'S LICENSE NUMBER/STATE ISSUANCE DATE EXPIRATION DATE HOME TELEPHONE WORK TELEPHONE CELL PHONE FAX NUMBER WEB SITE ADDRESS/EMAIL PHYSICAL ADDRESS MAILING ADDRESS GUARANTOR/CO-MAKER ON OTHER LOANS (Lender name, term, and amount) COMPLETE FOR JOINT CREDIT, SECURED CREDIT OR IF YOU LIVE IN A COMMUNITY PROPERTY STATE: ID VERIFICATION: MARRIED SEPARATED UNMARRIED (Single - Divorced - Widowed) or CHECK IF ADDITIONAL GUARANTOR/CO-APPLICANT INFORMATION ACCOMPANIES THIS APPLICATION. 6 7 SOURCES OF INCOME Important Notice to Individuals ALIMONY-CHILD SUPPORT: The inclusion of alimony, separate maintenance, or child support as income is voluntary and need not be revealed if you do not wish to have it considered in evaluating this application. GROSS ANNUAL INCOME NET SALES BASE SALARY OVERTIME BONUS AND/OR COMMISSIONS DIVIDENDS/INTEREST NET RENTAL INCOME ITEMIZED OTHER: 1. 2. 3. 4. 5. TOTAL ANNUAL INCOME LENDER APPLICANT CREDITOR INFORMATION PURPOSE GUARANTOR OR CO-APPLICANT #1 CURRENT BALANCE GUARANTOR OR CO-APPLICANT #2 MONTHLY PAYMENT TOTAL SPOUSE (IF APPLICABLE) HOW SECURED CHECK IF ADDITIONAL CREDITOR INFORMATION ACCOMPANIES THIS APPLICATION. TOTALS 8 FINANCIAL INFORMATION Please include copies of the following checked items as attachments to this application: Federal Tax Return For: Balance Sheet for Current Year for: Borrower Guarantor/Co-Applicant(s) Current Year Other: Income Statement for Current Year: Borrower Guarantor/Co-Applicant(s) Borrower Guarantor/Co-Applicant(s) Other: Borrower Guarantor/Co-Applicant(s) Business Plan Franchise Agreement (if applicable) Accountant Name: Address: Telephone: AXB203-e 11 Small Business Lending Documents User Guide
Page two instructions Instructions are given for each section of the document. Please refer to the corresponding number on the sample document to determine each section s relative position on the document. 5. Provide guarantor/co-applicant information. This section collects information from the guarantor or co-applicant. The document provides two sets of fields for collecting information from more than one guarantor or co-applicant. If more than two parties are involved as guarantor or co-applicant, an additional application should be used. Some community property states may require the co-applicant section to be completed. Check with your own attorney for guidance. If the information for an item in the Guarantor/Co-applicant section is the same as the information for the same item in the Applicant section, complete the item by filling in SAA ( Same as applicant ). 6. Record sources of income. This section collects information from the applicant and the guarantor/ co-applicant regarding annual income from the following sources: Net sales and base salary Overtime, bonus and/or commissions Dividends/interest and net rental income Other income 7. Record creditor information. This section collects information from the applicant concerning his/her credit history. Information collected in this section for each creditor includes: Lender name Purpose Current balance Monthly payment How loan was secured 8. Record financial information. This section collects information from the applicant and sometimes guarantor/co-applicant as specified by credit union underwriting policies. For each box checked by the Credit Union, the applicant will attach copies of the requested documents to the application. Financial information that may be requested include: Federal tax return for current or past year(s) and balance sheet for current year Income statement for current year Business plan Franchise agreement Checking with account number, institution, and balance Savings with account number, institution, and balance Other with account number, institution, and balance 12 Small Business Lending Documents User Guide
Page three sample Use the numbers provided to locate the corresponding instructions on the next page. FINANCIAL INFORMATION (continued) Financial Services Accounts Information: Checking Checking Borrower Guarantor/Co-Applicant(s) Number Attached Borrower Guarantor/Co-Applicant(s) Number Attached Savings Borrower Guarantor/Co-Applicant(s) Number Attached Savings Borrower Guarantor/Co-Applicant(s) Number Attached Other: Check if additional account information accompanies this application. Insurance Coverages (Property, Liability, etc.) Coverage: Policy #: Coverage Amount: Insurance Agent: Telephone Number: Other information (explain or indicate none) Active lawsuits or judgments: Filed bankruptcy: Tax obligations or claims: Environmental Impact Assessment Report: Attorney Name: Telephone Number: 9 STATE LAW NOTICES OHIO RESIDENTS ONLY: The Ohio laws against discrimination require that all creditors WISCONSIN RESIDENTS ONLY: Please sign if you are not applying for this account or loan with your spouse. The credit being applied for, if granted, will make credit equally available to all creditworthy customers, and that credit be incurred in the interest of the marriage or family of the undersigned. reporting agencies maintain separate credit histories on each individual upon request. The Ohio Civil Rights Commission administers compliance with this law. X SIGNATURE FOR WISCONSIN RESIDENTS ONLY DATE 10 SIGNATURES You promise that everything you have stated in this application is correct to the best of your knowledge and that the above information is a complete listing of what you owe. If there are any important changes you will notify us in writing immediately. You authorize the Credit Union to obtain credit reports in connection with this application for credit and for any update, increase, renewal, extension or collection of the credit received. You understand that the Credit Union will rely on the information in this application and your credit report to make its decision. You agree that requested documentation that accompanies this application is complete and correct and that it's incorporated as part of this application. If you request, the Credit Union will tell you the name and address of any credit bureau from which it received a credit report on you. It is a crime to willfully and deliberately provide incomplete or incorrect information in this application. X By: BORROWER CO-APPLICANT GUARANTOR TITLE: X Borrower Guarantor/Co-Applicant(s) Number Attached DATE By: BORROWER CO-APPLICANT GUARANTOR DATE TITLE: 11 VERIFICATION COMPLETION DATE BY The person(s) signing the application is/are indeed authorized to act on behalf of the borrower. Borrower, co-applicant(s), and guarantor(s), as appropriate grants to the credit union the authority to use reasonable means to verify application information by requesting credit bureau reports, accessing information about borrower, co-applicant(s), and guarantor(s), as appropriate from other third party information providers, and other means if applicable. Borrower further grants to credit union the right to share this information with third parties as reasonable in the normal course of doing commercial lending including sharing this information with a third party for purposes of underwriting the loan. Borrower agrees to pay any fees charged by the credit union for processing this application and other related expenses whether the application is approved or denied. You promise that the credit you are applying for is for a business purpose. By signing below or by using your card, you understand that either of those actions will constitute acknowledgment of receipt and agreement to the terms of the credit card agreement and disclosures. X By: BORROWER CO-APPLICANT GUARANTOR DATE TITLE: X By: BORROWER CO-APPLICANT GUARANTOR DATE TITLE: FOR CREDIT UNION USE ONLY GOVERNMENT LIST(S) CHECKED: TREASURY CIP LIST OFAC OTHER: LIST VERIFICATION COMPLETION DATE BY DATE APPROVED APPROVED SIGNATURE LIMITS: LINE OF CREDIT CREDIT CARD OTHER OTHER DENIED (Adverse Action Notice Sent) $ $ $ $ $ LOAN OFFICER COMMENTS: SIGNATURES: X DATE X DATE AXB203-e 13 Small Business Lending Documents User Guide
Page three instructions Instructions are given for each section of the document. Please refer to the corresponding number on the sample document to determine each section s relative position on the document. 9. Read state notices. This section discloses to borrowers living in Ohio and Wisconsin the following state specific information: Ohio law specifies that all creditors make credit equally available to all creditworthy customers, and that credit reporting agencies maintain and provide separate credit histories on each individual upon request. In Wisconsin the applicant should sign if he or she is not applying for this account or loan with his/her spouse. 10. Record signatures. This section collects signatures from the applicant and any guarantor/co-applicant. All applicants or guarantors should sign and date the application. By signing the applicant, co-applicant, and guarantor agree to the terms written in the signature section. 11. Reserved for credit union use. This section is for the Credit Union to use to document the request and other processing information according to credit union policy associated with its identity processes and procedures. 14 Small Business Lending Documents User Guide
Chapter 3: Business Credit and Continuing Security Agreement The Business Credit and Continuing Security Agreement (BCCSA) is the contract between the borrower and the Credit Union that consummates the business loan plan. It states that the Credit Union will grant the loan(s) to the borrower with the specific conditions outlined in this agreement and take a security interest in collateral offered to secure the loan(s). The BCCSA is an overall agreement between the borrower and the Credit Union and contains the general terms and conditions that will govern all loan transactions. A Business Credit Agreement Rider can be used to modify or amend this agreement. A Business Loan Receipt is used to provide specific terms and conditions for each loan transaction. The Business Credit Agreement Rider and Business Loan Receipt will be discussed in detail in the following chapters. Document Description When used: Purpose: Document number: How distributed: Imprinting: Number of pages: State-specific versions: When you have approved a business member for a non-real estate borrowing relationship. This document need only be completed once and will apply to all future non-real estate loans. It is the master agreement governing the terms and conditions that will be applied to each loan transaction. It defines the business terms and conditions that will be repeated in each loan transaction. BXB10* Borrower(s) signs the agreement. Borrower and credit union retain a copy of the document Credit union staff should be familiar with the content of this document because it may impact credit union policies and procedures. This document is kept with your credit union s file. This document allows an imprint of your credit union s name, address, phone number and logo. If the imprinting option is not selected, be sure to add your credit union name while processing the document Five None *Indicates spaceholder for version number 15 Small Business Lending Documents User Guide
Page one sample Use the numbers provided to locate the corresponding instructions on the next page. BUSINESS CREDIT AND CONTINUING SECURITY AGREEMENT This Business Credit and Continuing Security Agreement ("Agreement") includes this Agreement and may include a Business Credit Agreement Rider and Business Loan Receipt. "You", "you", "your" and "borrower" mean the person(s) or entity(ies) designated as a "Borrower" in the Signature section of this agreement. "Credit Union", "we", "our" and "us" mean the Credit Union whose name appears on the Agreement or anyone to whom the Credit Union transfers its rights under the Agreement. NOTICE TO COSIGNER: YOUR SIGNATURE ON THIS NOTE MEANS THAT YOU ARE EQUALLY LIABLE FOR PAYMENT OF THIS LOAN. IF THE BORROWER DOES NOT PAY, THE LENDER HAS A LEGAL RIGHT TO COLLECT FROM YOU. 1 2 3 4 5 1. HOW THIS AGREEMENT WORKS. This is an agreement to advance funds to you or on your behalf now or in the future. We anticipate that, from time to time, you will borrow money (called "Loans") under the Agreement. We are not required to make Loans to you under the Agreement and can refuse a request for a Loan at any time, unless we have expressly agreed on the Business Loan Receipt, to make obligatory advances. 2. CREDIT LIMIT. We may, but do not have to, establish a credit limit for certain Loans. If a credit limit is set, you promise not to exceed the established credit limit. If you exceed the credit limit, you promise to repay immediately the amount which exceeds the credit limit. 3. REPAYMENT. You (jointly, severally and in solido if more than one) promise to repay all amounts advanced to you or on your behalf along with other charges and interest. You will be advised of the required payment terms for a Loan on the Business Loan Receipt. Payments for a Loan will be due on the dates indicated in the Business Loan Receipt or on demand on or after the due date stated on the Receipt. Payments must include any amount past due and any amount by which you have exceeded any credit limit you have been given. You may repay all or part of what you owe at any time without any prepayment penalty. Even if you prepay, you will still be required to make the regularly scheduled payments unless we agree in writing to a change in the payment schedule. Unless otherwise required by law, payments will be applied to amounts owed under the Agreement, in the manner the Credit Union chooses. 4. INTEREST AND OTHER CHARGES. Interest will be computed separately for each separate Loan under the Agreement. To compute interest charges, the unpaid balance for each day since your last payment (or since a Loan if you have not yet made a payment) is multiplied by the applicable daily periodic rate as established by the Credit Union and stated on the Business Loan Receipt for that Loan. The sum of these amounts is the interest owed. The balance used to compute interest charges is the unpaid balance each day after payments and credits to that balance have been subtracted and any additions to the balance have been made. In addition to interest, we may charge other charges which are disclosed on the Business Loan Receipt and in other sections of this Agreement. If the interest rate is a variable interest rate, the Business Loan Receipt explains how the variable interest rate works. The interest payable by you under this Agreement shall never exceed the amount permitted by law. If it would exceed that amount because of the way interest is described in the Business Loan Receipt or Rider to this Agreement, the amount of interest payable by you will be considered reduced to the maximum permitted by law and any amount you pay in excess of that amount shall reduce the principal amount of the Loan. 5. POWERS, PURPOSE AND AUTHORITY; COMMERCIAL PURPOSE. You agree and warrant that if you are an entity you are duly and validly organized under the name of and in the form indicated in the Signatures section of this Agreement. You promise that each Loan made to you under this Agreement will only be used for commercial or business purposes, and not for the purchase or improvement of residential real estate or for personal, family, or household purposes. You promise that unless you have disclosed otherwise to us, in writing, you have not in the past or present operated or held property under any other name. You also promise that you have the authority and all due authorization to enter into and to agree to all provisions of this Agreement and to agree to all provisions of the documents related to this Agreement. 6 6. FINANCIAL CONDITION. You promise and warrant that the financial information you have provided to us accurately and completely reflects your financial condition and you understand that the Credit Union in advancing funds has relied upon the information provided by you. You promise to promptly provide us with written notice of any material change in your financial condition. Unless already disclosed to us, in writing, you promise and warrant that you are not the subject of any pending litigation, outstanding claims, any investigations or proceedings, or that you have any outstanding tax liabilities or any other outstanding unpaid obligations. 7 7. BORROWER'S PROMISES a. Access to records, premises, and collateral. Upon reasonable advance written notice, you promise to promptly provide us or our representatives access to and permit them to examine, inspect and copy all or any part of your books and records wherever such books and records may be located or stored. If requested, you will make them available at your main office. You promise to promptly provide us or our representatives access to, and allow us or them to inspect your premises and collateral. b. Additional indebtedness. Other than your indebtedness to us, you agree not to incur, guaranty or become obligated on any additional indebtedness, except as we may expressly permit in advance, in writing, and except in the case of accounts payable as necessary in the ordinary course of your business. c. Execution of additional documents. You agree to execute and deliver any document or agreement we may request in order to document or secure a Loan. You grant us an irrevocable power of attorney coupled with an interest, to sign or otherwise act on your behalf in order to secure a Loan or facilitate the repossession of property securing a Loan. d. Updating credit information. You promise that you will promptly give us written notice if there is a material change in your financial condition, if you become the subject of litigation, a claim, an investigation or proceeding or if any action against you arises that may materially affect your financial condition. You promise to promptly give us written notice if you change your name, there is a change in your ownership or form of organization, or if any other information you provided to us changes. Upon our request, you also agree to promptly provide us updated financial information or any other information we may request. CUNA MUTUAL GROUP, 2004, 06, 07, ALL RIGHTS RESERVED BXB106-e 16 Small Business Lending Documents User Guide
Page one instructions Instructions are given for each section of the document. Please refer to the corresponding number on the sample document to determine each section s relative position on the document. 1. How this agreement works. This section describes in general terms how the agreement works for loans now and in the future. 2. Credit limit. This section explains that the agreement may or may not include a credit limit. It also explains what the borrower s responsibilities are if the agreement includes a credit limit. 3. Repayment. This section explains in general terms the borrower s responsibilities for repaying the loan including charges and interest. Specific repayment terms for each loan are given in the Business Loan Receipt. 4. Interest and other charges. This section explains how interest and other charges will be addressed under the agreement. Specific terms regarding the interest rate and fees for each loan are given in the Business Loan Receipt. 5. Powers, purpose and authority; commercial purpose. This section explains to the borrower that all loans made under this agreement must be for a business purpose and that the borrower must be authorized to enter into this agreement. 6. Financial condition. This section explains that the borrower promises that all financial information given is accurate and reflects his/her current financial condition. 7. Borrower s promises. This section explains the borrower s responsibilities under this agreement. Provide access to records, premises, and collateral as needed Refrain from additional indebtedness except as permitted by the Credit Union Provide for any required execution of additional documents as needed to secure a loan or to facilitate the repossession of property used for securing the loan Update any material change in his/her credit information Provide prior notification for any change in name, location, state residence, or bulk sale of assets 17 Small Business Lending Documents User Guide
Page two sample Use the numbers provided to locate the corresponding instructions on the next page. e. Notification prior to change of name, change of location, change of State of residence or bulk sale of assets. Except for the sale of assets in the ordinary course of business to buyers who qualify as buyers in the ordinary course of business, you agree to give us sixty (60) days advance written notice before you sell, lease, transfer or in any other way dispose of all or a material portion of your assets. You also agree to give us sixty (60) days advance written notice before you move the location of your principal offices, change your state of residence, change the state whose laws you are organized under or change your organizational name. f. Compliance with laws. You promise that you are in compliance with and will continue to comply with all laws and obligations applicable to you and to your property. You may in good faith dispute any law and refuse to comply with it pending the outcome of your challenge and any appeals provided that you are following appropriate procedures for challenging the law and you have set aside adequate reserves to pay all losses, costs and expenses. 8 9 10 8. SALE OF LOANS. You agree that we may sell all or part of any Loan made under this Agreement and that we may share any information about you in order to facilitate such a sale. You waive any right to notice of sale or resale. You waive any right of set-off or counterclaim that you may have against us or any purchaser of an interest in a Loan. You agree that any purchaser of an interest in a Loan may enforce its interest in a Loan against you regardless of any personal claims and defenses you may have against us. 9. PLEDGE OF SHARES/STATUTORY LIEN. You pledge and grant as security for the Agreement and all other obligations you may have now or in the future all shares and dividends and, if any, all deposits and interest in all accounts you have with us now and in the future. If a specific dollar amount is pledged for a Loan, as agreed on a Business Loan Receipt, we will freeze shares in that account to the extent of the outstanding balance of the Loan or, if greater, the amount of the pledge if the Loan is a revolving loan. If we do not apply your shares to satisfy your obligation, we reserve the right to place an administrative freeze on your share accounts in order to protect our statutory lien rights against your accounts and we may apply them to the amount you owe us at a later time, if we choose. Otherwise, your pledged shares may be withdrawn unless you are in default. In addition to your pledge of shares, we may also have what is known as a statutory lien on all individual and joint accounts you have with us. A statutory lien means we have the right under federal law and many state laws to claim an interest in your accounts. We can enforce a statutory lien against your shares and dividends, and if any, interest and deposits, in all individual and joint accounts you have with us to satisfy any outstanding financial obligation that is due and payable to us. We may exercise our right to enforce this lien without further notice to you, to the extent permitted by law. For all borrowers: The statutory lien and/or your pledge will allow us to apply the funds in your account(s) to what you owe when you are in default. The statutory lien and your pledge do not apply to any Individual Retirement Account or any other account that would lose special tax treatment under state or federal law if given as security. 10. THE SECURITY FOR THE AGREEMENT. You give us a security interest in all property described in a Business Loan Receipt, issued to you when you receive a Loan, wherever the property is located and whether you presently own the property or acquire it at a later time. This property, along with the items mentioned below, is sometimes referred to as "collateral". The security interest you give includes, with respect to the collateral: All accessions. Accessions are things which are attached to or installed in the property now or in the future. All replacements for the property. All additions to the property. All Proceeds. Proceeds include, but are not limited to, any money you receive from selling the property or from dividends or stock splits, from insurance you have on the property, or from other third parties and insurers who are responsible for damage or destruction to the property. If the value of the property declines, you promise to give us more property in an amount or value determined in our sole judgment to be suitable as security, if asked to do so. 11 12 11. WHAT THE SECURITY INTEREST COVERS/CROSS COLLATERALIZATION. The security interest in property you give as security will secure all amounts owed under this Agreement, and under any receipt, voucher or any other document you receive at the time of the Loan including any extensions, renewals or refinancings and all other loans and obligations you have with us now or in the future, including overdrafts, except any loan which was secured by your principal residence. Property securing other loans you have with us will also secure the Agreement if the security agreement given to secure that loan covers future obligations. 12. DISCLAIMER OF CERTAIN SECURITY INTERESTS. We disclaim any security interest in household goods in which we are forbidden by law from taking a security interest. 13 13. DEFAULT. You will be in default if you do not make a payment of the amount required when it is due or, if payment is subject to demand, when demanded. You will be in default if you break any promise you made under the Agreement or if anyone is in default under any security agreement made in connection with a Loan under the Agreement. You will be in default if you, a Guarantor, a partner or a majority owner dies, files for bankruptcy or similar proceeding, or becomes insolvent. You will be in default, if you or a Guarantor make any false or misleading statements in any credit application, financial statement or similar document or if any statement becomes misleading due to a change in circumstance and you fail to correct that statement, or if you merge, dissolve, reorganize, or your legal existence is terminated. You will be in default if the value of your property is impaired or substantially declines in value or if something happens that we believe may substantially reduce your ability to repay what you owe or if we otherwise reasonably believe that we are insecure. You will be in default if for any reason we are unable to perfect our security interest in any collateral you have given us as security for a Loan. You will be in default if any of your property is repossessed, confiscated, forfeited or used in such a manner or for a purpose so as to make it subject to forfeiture or confiscation. You will also be in default under the Agreement if you are in default under any other loan agreement with us. 14 14. ACTIONS AFTER DEFAULT. When you are in default and after any notice of default and expiration of any right you may have under applicable state law to cure your default, we can require immediate payment (acceleration) of the entire unpaid balance under the Agreement. When you are in default any commitment or obligation we may have under this Agreement or any related document shall immediately terminate, including any obligation to advance additional funds. You waive any right you have to demand for payment, notice of dishonor, notice of intent to accelerate, and notice of acceleration or notice of demand for payment. If immediate payment is demanded, you will continue to pay interest until what you owe has been repaid, at the applicable interest rates in effect or, if applicable, at the default rate disclosed on the Business Credit Agreement Rider or Business Loan Receipt. If a demand for immediate payment has been made, your shares and/or deposits can be applied towards what you owe as provided in the Section called PLEDGE OF SHARES/STATUTORY LIEN. We can also exercise any other legal rights we may have when you are in default. BXB106-e 18 Small Business Lending Documents User Guide