Loan Administration

Loan Administration. Loan Closing. All closing documents must be properly executed, and a copy must be provided to the MDA upon the loan closing. The Financial Institution may be asked to provide, in writing, all required information for the preparation of any SBLGP loan closing documents. All exhibits to the closing documents must be filed and copies must be sent to MDA no later than thirty (30) days from the date of the closing. Lender Fee. The financial institution may charge the business a servicing fee, which may not exceed two percent (2%) of the SBLGP loan amount greater than $25,000 or $500 for loans under $25,000. The fee will be a one-time charge collected at the loan closing. The fee may be paid directly by the business, deducted from the SBLGP loan proceeds, or financed as part of the Financial Institution’s loan. Loan Servicing. The Financial Institution will be responsible for underwriting and servicing the SBLGP loan. Lenders must provide all key terms in an easy-to understand manner. Such disclosures could include: the loan or investment amount, payment obligation and schedule, any terms giving the participant control over the borrower’s or investee’s cash balances, cash flows or ownership, any conversion rights and future rights to purchase equity, and any fees or extra costs. The Financial Institution will enforce the terms and conditions of all closing documents executed for the SBLGP Loan. Reporting. The Financial Institution will report quarterly to the MDA on the status of the loan. The Financial Institution will submit a loan transaction history report summarizing the current balance, payments on principal to date, payments on interest to date, and any past due statements. The Financial Institution will also complete and submit an annual report in the format to be provided by the MDA. Additionally, the lender is required to immediately report any material change in the status of the borrower or collateral. Prepayment & Loan Default. The Financial Institution shall notify the MDA in writing of any prepayments of the Financial Institution’s loan. The Financial Institution’s Loan and Note is prohibited from being sold, assigned, conveyed, sub-participated, subdivided, encumbered, or otherwise transferred. The MDA will consider any loan that has become delinquent in amount equal to the required payment to be in default. In the event of a loan default, the Financial Institution will submit a claim form on the guarantee once all required collection procedures have been performed. The guarantee payments will be calculated after all collateral has been applied to the outstanding balance. The SBLGP guarantee will reimburse the financial institution for its loss, up to the percentage of the SBLGP guarantee. Audit. Guaranties made under the SBLGP are subject to audit by the State Department of Audit