The Lender's Advantage Newsletter - August 2013

Newsletter Date: August, 2013

America's Small Businesses and the Affordable Care Act:   Strengthening Health Care for Small Businesses

Health care is a top concern for small business owners across the country, and many employers want to provide coverage but often can’t afford to do so.  Historically, the health care market has been broken for small businesses.   In fact, many small businesses pay as much as 18 percent more than their larger competitors for the same coverage.

The Affordable Care Act will help small businesses in two critical ways: by increasing access and offering affordable options.  The law provides access to better health care options for both the employer and employees. The law helps to lower the growth of premium costs and provides a number of key benefits for small businesses—including tax credits and the opportunity to pool their buying power with other small businesses in the new Small Business Health Options Program (SHOP) Marketplace, also sometimes referred to as the Exchange.  It is expected that competition through the new Marketplaces will help to drive down premium costs..

The law also provides special tax credits for small businesses to help cover the premium costs of employee insurance. Hundreds of thousands of businesses and business owners with fewer than 25 full-time equivalent employees have already taken advantage of tax credits covering 35% of their premium contribution, and the maximum tax credit available will rise to 50% in 2014.

The SHOP Marketplace will allow small business owners to get comprehensive information about benefits and quality, side-by-side with facts about price, and will help them benefit from insurance with lower administrative costs and allow them to pool risk. Currently, an average U.S. family and their employer pay $1,000 a year extra in health insurance costs to cover care for those without insurance. The law‘s employer shared responsibility provisions, which take effect in 2015, help to address this imbalance by requiring the small number of businesses with 50 or more full time or equivalent employees that don’t offer coverage to their full-time workers to pay an assessment.

The Small Business Administration and Small Business Majority recently announced several Affordable Care Act 101 weekly webinar dates.  Each week, small business owners can learn the basics of the Affordable Care Act and what it means for their company and employees, including insurance reforms, the small business health care tax credit, the new health insurance marketplaces, and employer shared responsibility provisions.  SBA representatives help small business owners understand the facts of the Affordable Care Act so they can make informed decisions about providing health insurance for their employees. Below are the registration links for upcoming presentations:

For more information on how the new health care law affects small businesses, check out www.businessusa.gov/healthcare. 

Rates

Effective June 26, 2013, The Office of Financial Assistance announced the 4th Quarter "Peg" Rate, Direct Interest Rate and Maximum Interest Rate of a Third Party Lender Loan for a 504 Project. Please click on the PDF attachment below to view SBA Information Notice 5000-1277.5000-1277.pdf

Current Lender Activity Report

The July 2013 SBA Lending Activity Report is now available.  Click here to review the report.

West Texas District Office - Most Active SBA Lenders & Micro-Lenders

Do you want to find out which lenders and certified development companies are making the most SBA loans in this District?  Click here for detailed information regarding our most active participants in the SBA Loan Programs.

Lender Relations Hot Topics

SBA Information Notice - 5000-1278 - Revision to SOP 5010 5(E) -  Change of Ownership Transactions

SBA Information Notice 5000-1278 with an effective date of July 1, 2013 announced a revision to Standard Operating Procedure (SOP 5010 5(E) regarding the structure for change of ownership transactions involving the purchase of stock or partnership or membership interests.  Currently, the SOP states that the business must be the borrower in such transactions and the loan may not be made to an individual.  Effective July 1, 2013, in change of ownership transactions, an individual may obtain an SBA 7(a) loan as a co-borrower to purchase ownership of a small business, provided that all of the following conditions are satisfied:

  • The loan application must meet the requirements set forth in 13 CFR 120.202, Restrictions on loans for changes in ownership (i.e., loan proceeds must not be used to purchase a portion of a business or a portion of another owner’s interest in a business);
  • The Note must be executed, jointly and severally, by both the individual and the business (in other words, the individual and the business entity must be co-borrowers). (Note: If the small business denies liability on the debt based on an alleged failure of consideration under applicable state law, SBA may deny liability on its guaranty.); and
  • The application must show that the change of ownership will promote the sound development and/or preserve the existence of the small business applicant. Please click on the PDF attachment below to view SBA Information Notice 5000-1278.5000-1278.pdf

SBA's Policy Regarding Increases to 7(a) Loans

Loan increases to 7a loans, regardless of the disbursement status, are subject to statutory, administrative, and program maximums and must be approved by SBA.  In addition, the “Servicing and Liquidation Actions 7(a) Lender Matrix” requires prior SBA approval.  If final disbursement has been made, approval would be requested by utilizing SBA Form 2237.  Once completed, SBA Form 2237 would be sent to the SBA Little Rock Servicing Center using the following link:  lrsc.servicing@sba.gov.  If the maturity of the loan exceeds one year, the additional guaranty fee would have to be paid by utilizing the Pay.gov website. 

If the request for an increase is more than 20% of the original loan amount or is more than 18 months after the original approval date of the loan, the lender must include with its request its analysis showing that the purpose of the increase is the same as the original purpose of the loan and that the borrower’s cash flow can support the increased payment amount per SOP 50 10 5(E), Subpart B, Paragraph (I) (D) (1&2).

Click here to view the SBA Servicing and Liquidation Matrix.  

If you have questions, please contact Roger Henderson, Lender Relations Specialist/Brand Manager at 806-472-7462 ext. 107 or by email at:  roger.henderson@sba.gov

Lender Roundtable - Amarillo, Texas - Thursday, September 12,  2013

The West Texas District Office would like to invite all lenders in Amarillo to attend an SBA Lender Roundtable meeting that will be held at Dyer's Bar-B-Que on Thurssday, September 12, 2013, from 11:30 A.M. to 1:00 P.M.  Lenders will have the opportunity to network and receive the latest updates on the SBA loan programs. Dyer's Bar-B-Que is located at 1619 S. Kentucky Street, Suite E526 in Amarillo, Texas.  If you are interested in attending this event, please contact Derenda Fisher at 806-472-7462 ext. 123 or by email at: derenda.fisher@sba.gov  

Lender Roundtable - Lamesa, Texas - Tuesday, September 17,  2013

The West Texas District Office would like to invite all lenders in Lamesa and surrounding communities to attend an SBA Lender Roundtable meeting that will be held at Pedroza's Restaurant on Tuesday, September 17, 2013, from 11:30 A.M. to 1:00 P.M.  Lenders will have the opportunity to network and receive the latest updates on the SBA loan programs. Pedroza's Restaurant is located at 1501 N. Dallas Avenue in Lamesa, Texas.  If you are interested in attending this event, please contact Derenda Fisher at 806-472-7462 ext. 123 or by email at: derenda.fisher@sba.gov

Lender Roundtable - Shamrock, Texas - Thursday, September 19,  2013

The West Texas District Office would like to invite all lenders in Shamrock and surrounding communities to attend an SBA Lender Roundtable meeting that will be held at El Sombrero Restaurant on Thursday, September 19, 2013, from 11:45 A.M. to 1:15 P.M.  Lenders will have the opportunity to network and receive the latest updates on the SBA loan programs. El Sombrero Restaurant is located at 210 S.Main Street in Shamrock, Texas.  If you are interested in attending this event, please contact Derenda Fisher at 806-472-7462 ext. 123 or by email at: derenda.fisher@sba.gov

Lender Roundtable - Lubbock, Texas - Tuesday, September 24,  2013

The West Texas District Office would like to invite all lenders in Lamesa and surrounding communities to attend an SBA Lender Roundtable meeting that will be held at Texas Land & Cattle Steak House on Tuesday,  September 24, 2013, from 11:30 A.M. to 1:00 P.M.  Lenders will have the opportunity to network and receive the latest updates on the SBA loan programs. Texas Land & Cattle Steak Hhouse is located at 7202 Indiana Avenue in Lubbock, Texas.  If you are interested in attending this event, please contact Derenda Fisher at 806-472-7462 ext. 123 or by email at: derenda.fisher@sba.gov

SBA Opportunities Workshop - September 25, 2013

The Texas Tech University Small Business Development Center (SBDC) in Lubbock will host the SBA Opportunities Workshop on Wednesday, September 25, 2013, from 6 P.M. to 8 P.M.  The SBDC's address is 2579 S. Loop 289 in Lubbock.  Small business owners will have the opportunity to learn more about the SBA loan programs and to learn about the services provided by the Small Business Development Center.  Be sure to register for this event, please contact Elaine Melot at 806-745-1637 or by email at:  e.melot@ttusbdc.org

Training Calendar

We are currently in the process of establishing our lender training calendar for the last few months of 2013.  Our Lender Relations team can provide the training at your bank location or at our Lubbock District Office.  Training is available in the following topics:  Updates on the new SOP 50 10 5 (E), SBA Loan Programs, Purchasing & Liquidation or other topics.  To set up and lock in your training date, please contact the following individuals:   Armando Garcia, Lead Lender Relations Specialist at 806-472-7462 ext. 104/armando.garcia@sba.gov; Roger Henderson at 806-472-7462 ext. 107/ roger.henderson@sba.gov or Derenda Fisher at 806-472-7462 ext. 123/derenda.fisher@sba.gov

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