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SBA Loan Collateral vs. Guarantee: What’s the Difference?

Nerd Wallet

Personal guarantees and collateral are both ways of promising a lender that you’ll make good on your debt. Collateral ties a loan to a specific asset, like your business’s inventory or your home, which the lender can seize if your business can’t repay the. You may have to offer both to get an SBA loan.

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How to Get a Business Loan Without Collateral

Nerd Wallet

Business loans that don’t require collateral come in a variety of forms, including online loans, bank loans, Small Business Administration loans, invoice financing, equipment financing and inventory financing. The bad news is that, in place of collateral, lenders will often raise interest rates and fees, or require a personal guarantee or.

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How SBA Lenders Ensure Expense Recovery in Loan Liquidation and Litigation

Jimerson Firm

Lenders should be cognizant about what expenses are classified by the SBA as recoverable or non-recoverable. Recoverable Expenses” are defined as SBA approved, necessary, reasonable, and customary costs incurred to collect and enforce the terms of the Loan Documents, or to preserve or dispose of collateral. See SOP 50 51 3.

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What Responsibility and Authority do SBA Lenders Have in Servicing and Liquidating Loans?

Jimerson Firm

Lenders are responsible for servicing and liquidating all of the 7(a) loans in their portfolio. Lenders and CDC’s must be cognizant about their responsibilities and authority in servicing and liquidating SBA loans because failure to do so properly may lead to formal enforcement actions by the SBA Office of Credit Risk Management.

Lender 94
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Lenders Beware: Be Sure to Foreclose Subordinate Liens and Encumbrances

Jimerson Firm

Lenders must pay particular attention to subordinate liens and encumbrances prior to initiating any foreclosure action. Lenders can discover whether subordinate liens and encumbrances exist on a property by performing a title examination prior to initiating foreclosure. Subordinate Liens. York, 903 So. 2d 981, 983 (Fla. 2d DCA 2005).

Lender 97
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Post-Default Environmental Risk Management for SBA Lenders

Jimerson Firm

If a borrower defaults on a SBA loan, the lender or CDC must assess the environmental risk of contamination before conducting any liquidation action that could result in a loss, or otherwise increase the risk of loss, due to the actual or alleged presence of contamination. What Are Environmental Risks? SOP 50 10 5(E), Appendix 2.

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How Can a Secured Creditor Repossess Collateral Without Breaching the Peace?

Jimerson Firm

When a borrower applies for a loan, most lenders require the borrower to pledge an asset as security for the repayment of the loan, i.e. collateral. In the event the borrower defaults, usually by failing to make loan payments, a secured creditor has a right to take possession of the collateral. 679.609, Fla. 2d 1020, 1024 (Fla.