Best Practices to Close SBA 504 Loans Faster (Part 2)

Part 2 of 3 Part Blog Series

Satisfy your customers and avoid closing delays with these top tips to expedite closing!

Welcome back to our series on tips to avoid common closing delays! Here are the next set of tips and issues to be aware of to avoid some of the challenges that can arise in the closing process. 

1.     Life insurance

If life insurance is required, your borrower should make it a priority to obtain insurance and provide the assignment documentation to the Closing Officer as soon as possible. Acquiring and assigning life insurance can be a lengthy process and even rely on snail mail to deliver documents. Your Closing Officer will handle everything with the borrower but it’s important to be aware that the loan cannot close without confirmation of the assignment being in place.

2.     Third party tenant leases

Send third party tenant leases for review and pay attention to specific language that needs to be included in the lease. The Closing Officer will review these leases and determine if the tenant needs to sign a subordination agreement.

3.     Corporate organizational documents

The Authorization for Debenture Guarantee details the specific documents required for each type of business that we need to review. Often, these documents are incomplete, incorrect, or conflicts with each other. It’s important these are corrected to meet the SBA requirements, as well as ensure the loan closing documents are accurate. It’s also beneficial to your borrower to have all of their corporate documents in agreement.

We look forward to providing you with more tips on this topic in the third and final blog in this series, so stay tuned! In case you missed them, here’s the link to Part 1 and Part 3 of the series.

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