The Lender Advantage Newsletter - August 2013

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August 2013

The Lender Advantage Newsletter

A publication of the St. Louis District Office

If you have further questions on any of the items mentioned in this newsletter, please contact Tom Daiber, Bill Vickery or Bob Newman.

Changes in Identifying Franchise Loans in SBA Loan Submissions

On August 22, 2013, SBA issued Procedural Notice 2000-840 which makes changes to the way franchise loans are identified. Beginning on October 1, 2013 SBA will be using a new coding system to identify each franchise on an SBA-guaranteed loan – 7(a) or 504.  The number that will be used will be the FRANdata Unique Numbering System (FRUNS).  The FRUNS number will replace the franchise codes previously used by SBA.

This change is being made because SBA has determined that correct franchises are not being identified by lenders in the loan application process, and therefore not being properly identified in SBA’s loan records.  All loans that need to be identified as franchise loans include loans to businesses operating under franchise, license, dealer, jobber or similar agreements.

> View Full Notice

Understanding SBA 7(a) Loan Fees

The St Louis District Office frequently answers questions for our lenders related to fees on SBA loans, so we wanted to go over a few points.  The SBA collects loan guaranty fees in order that entrepreneurs (not the United States taxpayers) bear much of the cost of funding SBA’s financial assistance programs.  Guaranty fees are due within 90 days of the date of loan approval and may be financed with the proceeds of the SBA-guaranteed loan.

> Read more

Subsidy Recoupment (Prepayment) Fee

The question often arises, “Is there a prepayment penalty on SBA loans?”

For loans with a maturity of 15 years or longer, the borrower must pay to SBA a Subsidy Recoupment Fee when the borrower voluntarily prepays 25% or more of its loan in any one year during the first three years after first disbursement. The fee is 5% of the prepayment amount during the first year, 3% the second year, and 1% in the third year. If the lender believes that the prepayment of the loan is not voluntary, the lender may submit a request for a determination, with the lender’s supporting analysis, to the appropriate Commercial Loan Servicing Center (CLSC). The CLSC will submit the request, along with its recommendation to the Director of Financial Assistance(D/FA). Only the D/FA or designee can make the determination that a prepayment is involuntary.

Please Review Your Listing in the St. Louis District’s Active Lender List

You will notice in the right column under Resources, a link to the “Active Lender List for Eastern Missouri.” This document includes contact information for lenders who originate SBA-guaranteed and SBA microloans.  Please take a moment to click on this link and review the information. Because this list is included on the webpage of the St. Louis District and is distributed to small business owners, entrepreneurs and resource partners, it is important the contact information for your lending institution is correct, including the listing of loan programs in which your institution is able to participate.

If you find any information that is incorrect, please notify your Tom, Bill or Bob.


Active Lender List for Eastern Missouri

(Please make sure the listing for your bank is correct.)

Phone and Resource Partner List