2. How do we communicate with clients, banks, FMPP
• Most of the time, community bank were never suppose to handle clients with
multiple entities.
• Big banks who were used to multiple entities with MBA’s usually unwritten loans
through systems like Moody’s, S&P Financial Models, or CRE Calculators by
Mortgage Banking Association
• After the great near depression of 2008 and 2009, many wealthy borrowers are
now looking for loans, however community banks are not geared to take on the
clients. FDIC is encouraging community banks to lend to clients and borrowers
with better credit profile, but due to the regulatory environment, level of the
underwriting team, and lack of capital (for labor and lending both) community
banks are in a near death situation.
3. Current Environment
• How many financial institution does it take for SBA 504 loan to get done?
• How do we communicate to one another, when we are using different technology,
with different experienced people, different sets of ego, and different way of
communicating?
• Currently everyone uses emails to communicate, but the problems are humans
were never suppose to calculate that much information, but now with mobile
phones, twitter, Facebook, Email, and other instruments to communicate, rather
then working faster with collaborations, we are working longer trying to figure out
what each other is saying. That is the reason why borrowers, clients never want to
do a SBA 504 loan.
• The reason why banks do not want to do the SBA 504 FMPL loan is because of
confusion. Confusion in the program, but further because of labor cost. To
educate the new underwriters to collaborate with various different underwriting
systems and being able to communicate the
4. Misconceptions
• Most banks have had experience with CDC’s who used the PCLP license to do
the loan. (like PLP and CLP way to lend capital) Each has it’s own function.
• The new SBA 504 FMPP program does not allow PCLP, so with that each CDC
has to give the files to SBA, get an approval, and need to review the financial
decision of the CDC.
• There is no standard, standard in the loan. Since SBA 504 loan is a first lien
(bank), CDC (SBA) Second Lien, each bank or financial institution decides what
their credit appetite. So even-though CH Capital will assist in purchasing the loan
for Merrill, Morgan, CS, and rest of the, the problem comes down to
communication. How can we communicate remotely when there is no system in
place for us communicate, collaborate and come to an agreement with one
another.
6. STAGE 1
• Meet with Client
• Collect Prequalification Documents
• BDO Prescreen / Preflight
• Issue LOI
• Signed Fee Agreement
• Create contact in CRM
7. PREQUALIFICATION
DOCUMENTS NEEDED
Stage 1 - Loan Application Business Plan
Business Year-End Financial Statements
A01 - CDC Application Certificate of Good Standing
A03 - CDC Credit Memorandum CIP
A04 - Eligibility Questionnaire Compensation Agreement
A06 - Statement of Personal History Construction Cost Breakdown
A08 - Personal Financial Statement Current Proposed Lease
A09 - Personal Federal Income Tax Return (3 years) Drivers License Copies
A11 - History of Business Fee Disclosure-Borrowers Signature Cert
A18 - Projections - 12 Month Income & Expense Interim Financial Statements
New Business Contract Possibilities
A23 - Purchase Agreement-Escrow Instruction-Letter to Escrow
Ownership Structure MOD
A30 - Personal Credit Report & Explanations
Photo
Bank Analysis
Preliminary Title Report
Bank Balances
Projections (Annual)
Bank Credit Memorandum & Amendments
Resume
Business Debt Schedule to Reconcile w Interim Financial
Tax Lien Release
Statement
Tax Return Explanation
Business Development Breakdown
Non affiliated business tax returns
Business Financial Statement
* ALL docs should be filed in the stage 1-5
folders
8. ISSUE LOI – BANK REQUIREMENTS
SBA 504 and 7a
• Hanmi Bank (Page 5) - SBA 504 & 7a
• Zion Bank (Page 6 & 7) – SBA 504
• CDC Direct (Page 8) – SBA 504
9. HANMI BANK – LOI REQUIREMENTS
• Preflight with executive summary and 5 key bullet points
• Three year tax return on subject
• Three year tax return on personal and any other entities
• Payment history for two years
• Purpose of loan
• Business debt schedule
• Personal debt schedule
• Collateral description
• Brief summary about subject transaction and borrower/guarantor history.
• Any issues or risk to the Bank
10. ZION BANK – LOI REQUIREMENTS
Loan Package for Owner Occupied Properties
For all individuals who hold 20% or greater ownership in the holding company/operating company:
___ 1- Personal tax returns for the last three years
___ 2- Personal financial statements including schedule of real estate owned dated within the past 30 days
___ 3- Permission to pull credit (or a copy of a current credit report)
___ 4- Resume or brief personal bio explaining experience
___ 5- Verification of liquid assets (i.e. Bank statements, brokerage account statements)
For the Operating Company and Affiliates:
___ 1- Last three years of tax returns for the holding company, if applicable
___ 2- Last three years of tax returns and financial statements for the operating company and affiliates
___ 3- Interim financial statement for the operating company and affiliates dated within the last 60 days.
Please also provide a YTD financial statement from the same period for the previous year. (Example: 7/30/10 AND a 7/30/09)
___ 4- Debt Schedule for the operating company and holding company that matches the debt listed on the interim balance sheet
___ 5- Business History and Description
Other:
___ 1- Property description including SF, year built, construction material, property type (a copy of an old appraisal is very useful.)
___ 2- Sources and Uses
___ 3- Credit Memo from the referring lender detailing the specifics of the transaction- We basically ask for the same information that you would put
into your own credit write up.
For Refinance Transactions:
___ 1- A copy of the note to be refinanced, along with the most recent loan balance statement.
___ 2- When was the property purchased and what was the purchase price?
For Purchase Transactions:
___ 1- Copy of purchase agreement
11. ZION BANK – LOI REQUIREMENTS
Loan Package for Investor Properties
For all individuals who hold 20% or greater ownership in the real estate:
___ 1- Personal tax returns for the last three years
___ 2- Personal financial statements including schedule of real estate owned dated within the past 30 days
___ 3- Permission to pull credit (or a copy of a current credit report)
___ 4- Resume or brief personal bio explaining experience
___ 5- Verification of liquid assets (i.e. Bank statements, brokerage account statements)
For the property:
___ 1- Rent roll (we need to know at least: tenant name, suite number, lease commence date, lease end date, SF occupied, lease
rate, CAM charges (if applicable)) Vacant space needs to be included.
___ 2- Last three years of tax returns and financial statements for the subject property
___ 3- Interim financial statement for the subject property
___ 4- Copy of existing or proposed leases
___ 5- If any one tenant occupies more than 50% of the space OR is responsible for paying 50% or more of the gross rents, the last
two years of financial statements on that tenant are required.
Other:
___ 1- Property description including SF, year built, construction material, property type (a copy of an old appraisal is very useful.
___ 2- Sources and Uses
___ 3- Credit Memo from the referring bank detailing the specifics of the transaction- We basically ask for the same information
that you would put into your own credit write up.
For Refinance Transactions:
___ 1- A copy of the note to be refinanced, along with the most recent loan balance statement.
___ 2- When was the property purchased and what was the purchase price?
For Purchase Transactions:
___ 1- Copy of purchase agreement
12. CDC DIRECT – LOI
REQUIREMENTS
• Last year business tax return
• YTD business financial statement with corresponding debt
schedule
• Last year personal return
• Personal financial statement
• Purchase agreement or letter of interest to purchase the building
13. FEE AGREEMENT
• After we have an LOI Issued then we would need to get a
fee agreement together and get have the client sign.
(Fee agreement can be found in SharePoint)
• Collect the deposit for third party fees
14. CREATING CLIENT CONTACT - CRM
• Be sure to check that the client does not already have information in
CRM
• If client is new then add ALL information pertaining to client into CRM –
including any spouse and/or children information
• After contact has been created
• Create the LOAN within CRM – be sure you create this through the clients
contact information so that everything is linked properly. ALL loan
information needs to be created as well as the OPPORTUNITY added that
corresponds with the loan
15. STAGE 2 – PRE QUALIFY
• Send Out Welcome Package
• Create custom email within SharePoint
• Gather Documents
• A02 – SBA Form 1244
• A05 – Supplemental
• Tax Transcript Request
• Upload Information into CRM & SharePoint
(In Stage 1-5 folders)
• Send Complete Package to Underwriter
16. CREATING CUSTOM EMAIL - SHAREPOINT
• To Create Site
• Click on “Site Actions”
• Click on “New Site”
• Under “Team Site” – enter in “Customer name in the
“title” box & “URL” box and click – create
• Click on the newly created Site & click on “libraries” in left
column
• Click “site actions” again
• Click on “New Document Library” – Then enter “loan
name”
• Click “yes” on ALL options & then click create ( the loan
will then be found in the left column)
17. CREATING CUSTOM EMAIL -SHAREPOINT
(Cont.)
• Click on the new loan doc library that you just created & at the top of the page
in the “ribbon” you’ll see “library tools”
• Click on “Library” within the Library Tools ribbon
• Within the ribbon you’ll find a button labeled “Library Settings”
• Next you want to click on “Incoming Email Settings”
• Click “yes” for – “allow document library to receive email & create a SIMPLE
email address that’ll be used to upload client docs to SharePoint
• Click “yes” for ALL settings and be sure to click at bottom – “Accept email
from any sender” – then click “OK”
• Your clients email will be
• (Whatever u created)@wssv023.e1.serverdata.net
18. STAGE 3 – LOAN APPROVAL
• Approval from Underwriter
• Order Title – Appraisal & Phase 1
• A27 - Appraisal for Property & SBA Approval
• A28 - Environmental - TSA or Phase 1 & SBA Approval
• Appraisal Approval
• Environmental Approval
• Authorization Wizard
• C02 - SBA Loan Authorization & 327 Action Letters
• Collect Final Documents for Closing
19. STAGE 4 – LOAN CLOSING
Closing Documents Needed
C08 - Interim Lender Certification - SBA Form 2288 Insurance Personal Property
C09 - Third Party Lender Agreement - SBA 2287 Insurance RE
C13 - Title Policy - ALTA
Proof of Project Costs & Equity
C14 - Filed UCC - 1
Seller Note & Deed
C19 - Leases - EPC - OC - Tenant Certs Assignments
Site Visit
C21 - Flood Insurance - FEMA Form
Subordination Agreement
C27 - 504 Loan Closing Acknowledgement & Consent
Subordination Agreement Seller
C29 - Interim Lender-Note & Deed of Trust
C40 - ACH Authorization & Voided Check Survey or ILC
C41 - Participation Fee Tax ID
C42 - Wiring Instructions UCC Subordination
20. STAGE 5 – LOAN FUNDING
Agreements Docs Needed C34 - Trust Agreement - Certification & Resolution
Assignment of Loan Documents C38 - IRS W-9 Form
Assignments of Leases & Rents C44 - Injection-Cert Final Closing Statement & Certification
C01 - 504 Debenture Closing Checklist Customer Update Form
Lease Addendum
C04 - CDC Board Resolution - SBA Form 1528
Lease Assignment
C05 - Promissory Note - SBA Form 1505
Name Affidavits
C06 - Development Company DEB - SBA Form 1504
Non Homestead
C07 - Servicing Agent Agreement SBA Form 1506
SBA FMLP Program Authorization Agreement For Preauthorized
C11 - CDC Certification - SBA Form 2101 Payment - Debit
C12 - Opinion of CDC Counsel Statement Settlement Charges
C15 - Unconditional Guarantee - SBA Form 148-148L Third Party Lender Security Agreement
C16 - CDC Deed of Trust Title Policy
C17 - Assignment of Deed of Trust UCC
C20 - Hazard Insurance UCC Post Filing Search
