| Time Line to Debenture Funding |
| Lenders | : | Borrowers | : | Small Business | : | Brokers |
Time Line to Debenture Funding
The SBA funds loans on one day of the month. How it works:
- Completed packages are due by the end of the third month prior to the month we want to sell. Using May 14th as a funding date scenario, this is the track it is on.
- All borrower information, all Bank document information, and all fees need to be received one week prior to the end of February (Feb. 22) in order to allow sufficient time for the CDC review of everything and to finalize any outstanding items that may arise, because they do.
- Then that last week of February we need to have a complete package at the attorneys office for their review of the documents we have collected from borrower and bank to be sure they comply with the SBA guidelines.
- Our attorney then draws up documents and sends them to our borrower and the borrowers attorney for their review.
- The borrower will need to sign documents by Mid March (15,18 and possibly the 19th i.e)
- Once the documents are signed, we (CDC) take those documents that need recording to the title company for recording and issuance of a title policy. (The SBA requires a Title Policy before they fund the loan – a bit diff. than a Bank)
- Once our attorney receives the title policy and are satisfied there are no issues, they package up the file and send it to the District Office. For a May funding all signed docs and title policy must be there (to the SBA D.O) by March 28th.
- From that time there is approx 45-60 days for the District office to complete what they do and get documents to Colson services who does the servicing for SBA. Why is there a gap? The SBA attorney reviews all items and will determine if they are satisfied with it or if they have question or want things changed in the file.
- Finally, approximately the week prior to funding, the loan is priced. Once it is funded, funds are wired to the title company who will in turn wire the principal balance only to the Bank to payoff the Banks interim loan
IMPORTANT POINTS: Any loan that has an entity attached whether or not they are borrower or guarantor requires an attorney on their behalf. Their role is to review the docs sent by our attorney to verify the borrower is who they say they are and to complete an “opinion” letter. Our attorney will send them the letter for them to basically fill in the blanks.
Please Note: A lot of issues arise with entity items, example:
- Corporations-need Article of Incorporation recorded with the secretary of state (we need the recorded pages),By-laws completed and signed.
- Business License (all businesses require this, some borrowers don’t think it applies to them like Dr’s and insurance companies. But it does)
- If they use a fictitious name – a fictitious name statement is required along with the proof of publication. Same goes for LLC, LP’s etc.