In response to the impact of COVID-19, the Small Business Administration (SBA) announced the availability of Economic Injury Disaster Loans. While some business owners may be tempted to complete the SBA loan application on their own, a single misstep during this part of the process can cause serious problems down the road.
We counsel clients through preparation of the application, working with them to ensure all necessary documentation is accurate before submission. This critical step prepares the client to quickly and correctly respond to questions that routinely arise, and lessen the probability that the SBA will kick back the application due to missing or inaccurate data. If the documents are not properly crafted, it can seriously delay processing or can give rise to assets being secured as part of the loan that should not have been part of the process. Further, once documentation is submitted to the SBA, making any changes will create delays and invite unnecessary questions.
After the application is submitted, we review all of the loan documents, starting with the loan approval letter, a document that should NOT be signed by a borrower without counsel review. There are numerous requirements that are generally overlooked by the borrowers. We give clients a checklist and make sure they understand exactly what is needed to avoid potentially costly delays.
We also assist with the loan closing. This can be a straight forward process unless the SBA requires liens on real property or assignment of personal assets, which require third party approval. Without the proper documentation and information in place, the closing date will likely be delayed.
Shulman Rogers attorneys have performed work for SBA lenders and borrowers, and have liquidated SBA loans for lenders. Our vast experience helps our attorneys provide 360° perspective of the SBA process, another value-add for our clients.
The contents of this Alert are for informational purposes only and do not constitute legal advice. If you have any questions about this Alert, please contact the Shulman Rogers attorney with whom you regularly work or a member of the Shulman Rogers Business and Financial Services Department.
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