"Some pro tips for the negotiating table"
Originally Published in Minnesota’s Bench and Bar in April 2022. Link to Article: https://www.mnbar.org/resources/publications/bench-bar/columns/2022/04/01/some-pro-tips-for-the-negotiating-table
"Best Practices for Reviewing Franchise (and related) Agreements"
The SBA’s Final Rule on Affiliation and Lending Criteria for the SBA Business Loan Programs (88 FR 21074, click here to read) became effective on May 11, 2023. Implementation of […]
"SBA Procedural Notice on Implementation of Removal of the Loan Authorization"
Recently we shared Procedural Notice 5000-846991 which removed the requirement of using the SBA Loan Authorization effective May 12, 2023. The U.S. Small Business Administration (“SBA”) is delaying the implementation […]
"Reminder for SBA Procedural Notice on Implementation of Removal of the Loan Authorization"
This is a reminder that the SBA Procedural Notice 5000-846991 on Implementation of Removal of the Loan Authorization became effective today, May 12, 2023. Click here to read more on the SBA […]
"Reminder for SBA Procedural Notice on Implementation of the Final Rule on Affiliation"
This is a reminder that the SBA Procedural Notice 5000-846607 on Implementation of the Final Rule on Affiliation and Lending Criteria for the SBA Business Loan Programs became effective today, […]
"SBA Releases SOP 50 10 7"
The Small Business Administration (“SBA”) released the much anticipated SOP 50 10 7, Lender and Development Company Loan Programs, which will go into effect on August 1, 2023. Click here […]
"Importance of Monitoring Post-Filing Name Changes for SBA Loans"
While lenders focus on the importance of ensuring that UCC Financing Statements are filed and security interests are properly perfected, it is important to remain mindful of the possibility that […]
"Recent Prime Rate Increase – May 4, 2023"
Effective May 4, 2023, the Prime Rate increased from 8.0% to 8.25%. As a result, it is prudent for U.S. Small Business Administration (“SBA”) lenders to understand and utilize the […]
"Best Practices for Timely Submission of Litigation Plans"
Once a loan is classified into liquidation status, a lender will likely incur expenses relative to liquidation and collection. In many instances, lenders will retain legal counsel to assist the […]
"Best Practices for Completing SBA Form 1919 with Applicant Business Layered Ownership"
A common issue that we find when conducting U.S. Small Business Administration (“SBA”) loan reviews is the proper completion and execution of SBA Form 1919 (Click here to download a […]
"Recent Prime Rate Increase"
Effective March 23, 2023, the Prime Rate increased from 7.75% to 8.0%. As a result, it is prudent for U.S. Small Business Administration (“SBA”) lenders to understand and utilize the […]
"Managing SBA 7(a) Loan Prepayments"
While SBA borrowers are allowed to prepay their SBA 7(a) loans (in whole or in part), it is important for lenders to understand the prepayment scenarios that require specific procedures. […]
"What SBA Lenders Need to Know About Non-Compete Agreements"
When it comes to providing an SBA 7(a) loan to finance a “change of ownership”, SOP 50 10 6 states (in multiple sections), that the “purchase price of the business” […]
"Conducting Post-Default Site Visits"
Once a Small Business Administration (“SBA”) 7(a) loan is in default, lenders should conduct a thorough inspection of the borrower’s business premise. The reason is twofold. First, it provides lenders with […]
"Avoiding Lender Liability in Commercial Loan Originations"
When working with a prospective borrower, lenders should take the steps necessary to avoid the potential of future lender liability claims in the event that the relationship between the borrower […]
"Another Prime Rate Increase for 2022 – November 3, 2022"
Effective November 3rd, 2022, the Prime Rate increased from 6.25% to 7.0%. As a result, it is prudent for U.S. Small Business Administration (“SBA”) lenders to understand and utilize the appropriate Prime […]
"Another Prime Rate Increase for 2022 – September 22, 2022"
Effective September 22nd, 2022, the Prime Rate increased from 5.50% to 6.25%. As a result, it is prudent for U.S. Small Business Administration (“SBA”) lenders to understand and utilize the appropriate […]
"Another Prime Rate Increase for 2022 (Effective July 28, 2022)"
In case you missed it, effective July 28, 2022, the Prime Rate increased from 4.75% to 5.50%. As a result, it is prudent for U.S. Small Business Administration (“SBA”) lenders […]
"Credit Reporting for SBA Loans"
According to the U.S. Small Business Administration (“SBA”) Standard Operating Procedure 50 10 6, Standard Operating Procedure 50 57 2, and in accordance with the Debt Collection Improvement Act of […]
"Changes to Minnesota Statutes"
ew Minnesota laws took effect in August 2021, many of which directly impact the banking and lending community. Our team has been monitoring the Minnesota Legislature and Governor’s Office to […]
"Guidance on Refinancing of Interim Loans"
On September 8, 2021, SBA issued Policy Notice 5000-814473 (the “Notice”) outlining situations when 7(a) loan proceeds may be used to refinance a short-term loan originally made with the intent […]
"Understanding the Types of Bankruptcies"
One of the most common problems that financial institutions face is when a customer files for bankruptcy. It is essential that financial institutions have a fundamental understanding of the institution’s […]
"Understanding the Latest Guidance on PPP Guaranty Purchase, Charge-Off & Lender Servicing Responsibilities"
Now that the deadline for new Paycheck Protection Program (“PPP”) originations has passed, more lenders and borrowers are moving onto the PPP loan forgiveness process. To receive PPP loan forgiveness, […]
"Force Majeure under COVID-19 published by Jellum Law"
Aside from the human toll from COVID-19, the U.S. economy has struggled to adapt its laws and course of commerce to function in a challenging business climate. At the heart […]
"Securing Aircraft Assets published by Jellum Law"
Securing high-value aircraft, aircraft engines and other aviation assets present unique challenges for most lenders that take a security interest in aviation assets infrequently. Although no particular form is preferred, […]
"Phaseout of State of Minnesota Eviction Moratorium"
Since March 23, 2020, an eviction moratorium has been in place in Minnesota with respect to the ability to commence most eviction actions. On June 29, 2021, Governor Walz signed […]
"Optimize the Likelihood of Being Reimbursed for Legal Fees and Costs"
Once a loan is classified into liquidation status, a lender will likely incur expenses relative to liquidation and collection. In many instances, lenders will retain legal counsel to assist the […]
"Executive Order Staying Certain Garnishments Set to Sunset"
On May 4, 2020, Minnesota Governor Tim Walz issued Executive Order 20-50, which suspended certain collections actions relating to consumer debts. Specifically, the Executive Order prohibited creditors from serving garnishments […]
"Evictions and Foreclosures in the Midst of COVID-19 Pandemic"
Since March 13, 2020, a peacetime emergency has been declared in Minnesota with respect to the COVID-19 pandemic. Following the declaration of the peacetime emergency, Governor Tim Walz issued various […]
"Managing Defaulted Loans During the COVID-19 Pandemic"
When a loan falls into default, it may feel like a lender’s options are boxed in—accelerate, liquidate, and collect. Since the COVID-19 pandemic, it is no question that handling defaulted […]
"So, You have a PPP Borrower Wanting to Change Ownership"
Effective October 2, 2020, SBA issued a Procedural Notice, Control No. 5000-20057 (“SBA Notice”), regarding Paycheck Protection Program (“PPP”) loans and changes of ownership. The SBA Notice outlines the required […]
"Perfecting Security Interests in Various Collateral"
Commercial loans are often secured by a borrower’s business assets, which frequently includes items like equipment, inventory, accounts receivable, and real estate. Most lenders are very familiar with these types […]
"Avoid Citation In Your Upcoming PARRis Review"
Due to the restrictions placed on businesses during the COVID-19 pandemic, many lenders across the United States slowed, or temporarily halted, the origination of new U.S. Small Business Administration (“SBA”) […]
"Best Practices: Main Street Lending Program"
Due to the uncertainty related to the COVID-19 pandemic, the United States Federal Reserve established the Main Street Lending Program (“MSLP”) to support small and medium-sized businesses and non-profit organizations […]
"Do Yourself A Favor: Visit Foreclosed Properties"
With winter nearly upon us, it is important for foreclosing lenders to pay a visit to foreclosed properties to determine the vacancy status. If a foreclosed property is currently vacant […]
"Basics of Bankruptcy"
One of the most common challenges that lenders face is when a customer files for bankruptcy. It is essential that lenders have a fundamental understanding of the bank’s rights and […]
"Business Interruption Insurance"
Due to the COVID-19 pandemic and the recent civil unrest, business owners throughout the country have recently suffered losses caused by various business disruptions and property damage issues, and, as […]
"News Flash: SBA’s Interim Final Rule"
On February 10, 2020, The Small Business Administration (SBA) published an interim final rule and request for comments in the Federal Register. This interim final rule was published after receiving […]
"Watch The Clock!"
Unbeknownst to many litigants, state and federal governments have set up certain limitation periods to prevent stale claims in the court system. The theory being that litigants should be forced […]
"Taxpayer First Act"
Over the past several weeks, we have had multiple discussions with our clients regarding the amended provision to Section 2202 of the Taxpayer First Act of the Internal Revenue Code […]
"401(k) Rollover Reminder"
When a business owner proposes to capitalize a borrowing entity (in whole or in part) with the proceeds of a 401(k) rollover, the proposed SBA loan must be submitted for […]
"Documentation of Disbursements"
Disbursement of loan proceeds is a critical step in the SBA loan closing process. General disbursement requirements that apply to all 7(a) loans include stating the disbursement period in the […]
"Ensuring Your Collateral is Properly Insured"
When lending money to businesses, lenders typically require borrowers to provide evidence that the collateral securing their loan is adequately insured. Not only does the borrower need to have the […]
"New SAM Requirements: Documenting SAM Review as Part of Due Diligence"
On September 18, 2019, the United States Office of Inspector General completed an audit of the SBA . One of the recommendations of that report was that additional steps be implemented “to […]
"Protecting OREO Property"
Nothing is more disheartening than to enter OREO, post-foreclosure, and realize that a borrower has damaged the property or removed items such as furnaces; water heaters; sinks; cabinets; flooring; carpeting; […]
"Blockchain Technology and Banking Applications"
While some banks are at the forefront of the “cryptography” revolution, utilizing shared encrypted databases amongst multiple parties to access a constantly updated unalterable digital ledger, and are fluent in […]
"Offer in Compromise Process"
When a lender makes an SBA 7(a) loan, there are certain actions that the lender cannot unilaterally take without first obtaining approval from SBA. This includes certain workout and settlement […]
"Getting the Most from Your Judgment: Understanding Statutory Interest Rates"
When obligors default on their credit obligations, creditors will usually attempt to use work-out options before going to court. However, it is sometimes necessary to go through the courts and […]
"Considerations in Transfers of SBA 7(a) Loans"
Increasingly, we have heard from lenders that the SBA has given much scrutiny to the refinance of an existing SBA 7(a) loan with a new 7(a) loan. As a result, […]
"Navigating the SBA’s Rules for Franchises"
One of the important determinations that must be made on all SBA guaranteed loans is whether any affiliation concerns exist, and one of the more complicated affiliation issues that arises […]
"Strategies for Managing the Commercial Loan Post-Closing Process"
After a commercial loan transaction closes, it’s easy to feel that all the important work has been completed, but the truth is there are many post-closing matters that still require […]
"Abandonment of Collateral"
Frequently, there are several factors to be taken into consideration when deciding whether to pursue the recovery of collateral securing a loan. For example, the costs and expenses associated with […]
"Compliance With Beneficial Ownership Identification Requirements"
Starting on May 11, 2018, financial institutions operating in the United States have been required to create written policies and procedures designed to identify certain beneficial owners of most legal […]
"Considerations for a Request to Modify or Release Collateral Securing an SBA 7(a) Loan"
From time-to-time, a lender will encounter a scenario with an SBA 7(a) loan wherein an obligor requests that the lender modify or release the lender’s lien against collateral, which may […]
"Notarious Changes"
Effective January 1, 2019, Minnesota licensed notaries will be able to register to perform remote online notarizations. Also known as “webcam notarization” or “online notarization”, remote online notarization enables a […]
"Recouping Recoverable Expenses"
Once an SBA loan is classified into liquidation status, as set forth in SOP 50 57 2 page 77, a lender will likely incur expenses relative to repossession and preservation […]
"Work It Out: The Benefits of Loan Workouts for Lenders"
When a loan goes into default, it may feel as if a lender’s options are limited —accelerate, liquidate, and collect. However, a lender has various workout tools at its disposal […]
"Property Tax Forfeiture"
What is Property Tax Forfeiture? Property tax forfeiture is a process where the state takes ownership of real property if property taxes are not paid. When property taxes are not […]
"Environmental Considerations in SBA Gas Station Loans"
Loans made to or involving gas stations can present the lender with some unique environmental concerns. As such, the SBA Standard Operating Procedures (“SOPs”) include specific requirements for all loans […]
"CFPB Finalizes Rules for Small Creditors"
Various provisions in the new mortgage rules issued by the Consumer Financial Protection Bureau in January 2013 and May 2013 affected small creditors. Acknowledging that small creditors are a significant […]
"Mortgage Registration Tax in Minnesota on Mortgage Modifications"
When filing a mortgage, determining the amount of mortgage registration tax (“MRT”) is relatively simple. Except in the counties of Ramsey and Hennepin, MRT is calculated by simply multiplying the […]
"MBA Article – Dos and Don’ts of Loan Participations"
Loan participations have been a valuable tool in commercial lending for years. This is true primarily because they allow banks to participate in transactions that would otherwise present too much […]
"Tax Forfeitures"
This is a follow-up to our Advisor article “Property Tax Forfeiture”. The beginning of the year is the time to start thinking about property taxes in Minnesota. When property taxes […]
"CFPB – Small Servicers, Published in MBA News"
The September/October 2014 issue of MBA News published our following article: In January of 2013, the Consumer Financial Protection Bureau (“CFPB”) issued new rules implementing various provisions of the Real […]
"First Steps in Liquidation and Collection of a 7(a) SBA Loan"
While borrowers should repay their indebtedness in accordance with the terms and conditions of the loan, this is not always the case. Borrowers default and, as a result, lenders must […]
"Why You Shouldn’t Waive the Landlord’s Waiver"
Although seemingly a relatively straightforward document, Landlord’s Waivers (sometimes referred to as Landlord’s Agreements, Lessor’s Agreements, Landlord’s Consents, Landlord’s Certificates, etc., generally referred to as a “Landlord’s Waiver” herein) are […]
"2014 Legislative Session Update"
This year the Minnesota legislature made some significant changes to laws which affect banking and lending. The following is a brief summary of some noteworthy changes adopted by the legislature […]
"Renewal of Judgements"
Our office often works with our financial institution clients to determine not only how to collect on a judgment, but also when to collect on a judgment. There is no […]
"Property Tax Appeals"
PROPERTY TAX APPEALS MUST BE FILED BY APRIL 30, 2014. April is the month to be thinking about property taxes in Minnesota. Each spring, property owners are notified of their […]
"The New CFPB Mortgage Rules: A Summary of What They Are and What They Mean"
The Dodd-Frank Wall Street Reform Act and Consumer Protection Act (“Dodd-Frank Act”) amended both the Real Estate Settlement Procedures Act (“RESPA”), which is implemented by Regulation X, and the Truth […]
"Working With Borrowers Following Bankruptcy Discharge"
Our firm serves as the outside in-house legal counsel for many financial institution clients. In that capacity, we receive calls and emails from our clients every day with questions relating […]
"Important Power of Attorney Alert!"
Powers of Attorney – New Statutory Short Form Power of Attorney Effective January 1, 2014 This is a follow-up to our Advisor article sent on June 18, 2013, “Powers of […]
"Foreclosures and Loan Workouts Requiring 1099 Reporting"
In 2013 the economy has shown signs of improvement, and for financial institutions this has resulted in an increase of new loans, and, in general, a decrease in real estate […]
"Practice Tips for Preserving SBA Guarantees"
If an SBA 7(a) loan does not comply with with the applicable SBA Standard Operating Procedures (“SOPs”) and SBA Authorization, and a loss results, the SBA can either deny a […]
"Beyond Building Requirements: Accessibility under The Americans with Disabilities Act"
A reference to the Americans with Disabilities Act (ADA) tends to bring to mind building accessibility requirements, like ramps, and other adjustments that make a building more accessible. However, the […]
"Lessons from the Past can Protect you in the Future"
The past several years can provide valuable lessons to lenders in the unfortunate event that current or new loans end up in foreclosure. A proactive eye towards certain aspects of […]
"Important UCC Alert!"
2010 Amendments to the Uniform Commercial Code go into effect Monday, July 1, 2013. We are sending this as a follow-up to our The Advisor article sent on April 16, […]
"New Notice Requirements for Residential Contracts for Deed"
During the recession of the last several years, the amount of financial institution-owned real property reached historically record levels. As the economy continues to improve we are seeing, for the […]
"Right of Setoff vs. Perfected Security Interest in Deposit Accounts"
We often receive calls from our financial institution clients when they are served with a garnishment (most often from a private-party creditor), or a levy from a taxing authority (most […]
"Important SBA Alert!"
There have been changes to SOP 50 10 5(E); SOP 50 57; and the 7(a) Lender Matrix. Please reference the links below for the current versions: Updated SOP 50 10 […]
"What to Know about Filing UCC Financing Statements under the 2010 Amendments"
In 2010, a review committee finalized several changes (“2010 Amendments”) to the Uniform Commercial Code’s Revised Article 9. The 2010 Amendments have been enacted by the State of Minnesota, and […]
"Foreclosing SBA 504 Mortgages"
As many banking institutions continue to react to the effects of the economy, many are faced with the need to foreclose commercial mortgages originated under the U.S. Small Business Administration […]
"Ambiguous Language Can Absolve Liability Under Personal Guaranty"
Precise drafting of loan documents is essential when documenting a loan. Clear and unambiguous loan documents accurately reflect the agreement of the parties and protect both lenders and borrowers. When […]
"Marital Purpose Statements For Wisconsin Residents"
Many lenders are aware that Wisconsin law requires them to obtain a marital purpose statement when making a loan to a Wisconsin resident. However, there is a significant amount of […]
"Criminal Prosecution for Damages to Property Subject to a Mortgage"
Nothing is more disheartening than to enter OREO, post-foreclosure, and realize that a borrower has damaged the property or removed items such as furnaces, water heaters, sinks, cabinets, flooring, carpeting, […]
"Reaffirmation Agreements"
When a borrower files for relief under Chapter 7 of the United States Bankruptcy Code, the borrower is typically entitled to a discharge of the borrower’s debts. One of the […]
"Reminder! Property Tax Appeals Must Be Filed By April 30, 2011!"
April is the month to be thinking about property taxes in Minnesota. With the widespread decline in the market value of real property, many properties are being taxed at an […]
"Issues to Consider Prior to Acquiring OREO"
When an event of default occurs with respect to a loan that is secured by a mortgage encumbering real estate, there are a number of issues that should be investigated […]
"Foreclosing a Perfected Security Interest in LLC Membership Units/Interests"
In our most recent edition of The Advisor, we discussed the process for a lender to obtain and perfect a security interest in membership units/interests in a limited liability company […]
"Membership Interests in a Limited Liability Company as Collateral"
A limited liability company (“LLC”) is one of the most commonly chosen entity structures used by new businesses today. LLCs are owned by its members, who hold either membership units […]
"Shortening Foreclosure Redemption Periods in Minnesota"
Whether a lender is foreclosing a mortgage by publication or action, the process can be long and drawn out. This is especially true considering the fact that mortgagors in Minnesota […]
"Management of Vacant and Foreclosed Properties"
With winter fast approaching, it is important for lenders to pay a visit to real estate which is, or is about to become, subject to a foreclosure proceeding to determine […]
"It’s That Time of Year! 2010 Legislative Session Changes"
Almost every year the legislature amends and changes laws that affect the banking and lending community. This year is no exception. The following is a brief summary of some of […]
"Reporting Acquired or Abandoned Secured Property and Cancelled Debts: FAQS About 1099-A & 1099-C"
Now, more than in recent history, banks are faced with the realities of foreclosed, repossessed, or surrendered collateral, as well as forgiven or cancelled indebtedness. Accordingly, it is important that […]
"Acceptance of Partial Payments After Demand"
The question is often raised: “After sending a default notice demanding payment, can a lender accept a partial payment?” The easy answer is that a lender can, of course, accept […]
"Garnishment Update: Breaking News!"
In our recent Garnishment Update, which was circulated on March 30, 2010, we discussed the issues related to garnishments on joint accounts in light of the case of Enright v. […]
"Garnishment Update"
The Minnesota state legislature made a number of modifications to the garnishment section of the Minnesota Statutes. The legislature intended to make the garnishment process easier and more understandable for […]
