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SBA loan servicing encompasses any action taken after a 504 loan is closed and funded. Approval of the MBFC or SBA is required for any servicing action that changes the existing terms of the 504 loan.
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MBFC may, through unilateral authority, approve the following servicing actions:
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| 1. |
Correction of obvious typographical errors in the Loan Authorization. |
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| 2. |
Extend the final disbursement period as stated in the Loan Authorization for a period not to exceed six months, provided there is no adverse change in the financial condition of the borrower. |
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Provide payoff figures to the borrower. |
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Modify financial statement requirements. |
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Approve up to six months (cumulative) of payment deferment or 20% of the original amount of the loan, whichever is less, if the borrower can reasonably project that it will bring current the deferred amount within five years after the deferment period. |
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| 6. |
Release collateral valued up to 20 percent (cumulative) of the original loan amount |
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Approve the substitution of collateral of equal or greater value. |
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Permit the subordination of collateral for refinancing of senior liens if the borrower will not receive cash out, but will receive more favorable terms. |
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Make changes to life or hazard insurance requirements, including the release of insurance proceeds for the repair and replacement of damaged collateral and the release of cash surrender value of life insurance if absolutely necessary for the survival of the business and if future repayment of the insurance loan is anticipated from company profits. |
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| All other servicing actions must be approved first by MBFC and then by the SBA Loan Servicing Center. |
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| Please feel free to download the following forms and documents: |
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Prepayment Process
(File Type: PDF File Size: 63 K)
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Deferment Of Payment
(File Type: PDF File Size: 52 K)
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Loan Assumption
(File Type: PDF File Size: 64 K)
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Collateral - Subordination
(File Type: PDF File Size: 51 K)
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Collateral- Release
(File Type: PDF File Size: 49 K)
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Collateral - Substitutions/Exchange
(File Type: PDF File Size: 52 K)
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Guarantor Consent
(File Type: PDF File Size: 38 K)
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Lender Credit Memorandum
(File Type: DOC File Size: 61 K)
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Lender Credit Memorandum
(File Type: PDF File Size: 94 K)
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For questions regarding loan servicing actions, please contact Jennifer Fitzpatrick at
(320) 258-5010 or jennifer@mbfc.org.
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