Improvements to 504 loan closing procedure

Title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.) is amended— (1) in section 502 (15 U.S.C. 696), by adding at the end the following: (8) Closing An accredited lender certified company may take any of the following actions to facilitate the closing of a loan made under this section: (A) Reallocate the cost of the project with respect to which the loan is made in an amount that is not more than 10 percent of the overall cost of the project. (B) Make typographical corrections to any name that is applicable to the loan, including the name of any borrower, guarantor, eligible passive company described in subparagraph (C)(i), and operating company described in subparagraph (C)(i). (C) Add any of the following to receive proceeds of the loan: (i) An eligible passive company, as defined by the Administrator. (ii) If an eligible passive company is added under clause (i), an operating company with respect to that eligible passive company. (D) Make typographical corrections to the address of any property with respect to which the loan is made. (E) Make typographical corrections to the name of any interim lender, third-party lender, or provider of funds described in subclause (I), (II), or (III) of section 502(3)(B)(i). (F) Make a guarantor a co-borrower or a co-borrower a guarantor. (G) Add a guarantor that does not have any ownership interest in the business seeking financing or project being financed under this section. (H) Reduce the amount of debt owed by the borrower before the closing as a result of regularly scheduled payments. (I) Reduce the cost of the project with respect to which the loan is made. (9) Accredited lender certified company defined In this section, the term accredited lender certified company means a certified development company that the Administration has designated as an accredited lender under such section 507(b).; and (2) by adding at the end the following: 511. Closing and oversight (a) SBA district counsels Beginning on the date that is 180 days after the date of enactment of this section, with respect to the program established under this title, district counsels of the Administration shall be subject to the same requirements, and shall have the same authority and responsibilities, as in effect with respect to that program on the day before the date of enactment of this section, except that— (1) the Office of Credit Risk Management of the Administration shall have the responsibility for all duties relating to conducting file reviews of loans reviewed and closed by a designated attorney under this title; and (2) district counsels of the Administration shall not have any responsibility relating to the review of closing packages with respect to a loan reviewed and closed by a designated attorney under this title. (b) Designated attorneys For the purposes of this title, the following definitions and requirements shall apply with respect to a designated attorney of a Priority certified development company: (1) The term designated attorney means a certified development company attorney that the Administrator has approved to close loans for a Priority certified development company. (2) The term Priority certified development company means a certified development company certified to participate on a permanent basis in the program to provide financings established under this title and that the Administrator has approved to participate in an expedited loan and debenture closing process. (3) A designated attorney shall be responsible for certifying documents relating to the closing of a loan made under this title if such designated attorney submits to the Administrator evidence that such designated attorney— (A) is licensed and in good standing to practice law in the State in which such loan is being closed; (B) has professional malpractice insurance coverage; and (C) has attended a training course on closing loans made under this title that is approved by the Administration..

Title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.) is amended— (1) in section 502 (15 U.S.C. 696), by adding at the end the following: (8) Closing An accredited lender certified company may take any of the following actions to facilitate the closing of a loan made under this section: (A) Reallocate the cost of the project with respect to which the loan is made in an amount that is not more than 10 percent of the overall cost of the project. (B) Make typographical corrections to any name that is applicable to the loan, including the name of any borrower, guarantor, eligible passive company described in subparagraph (C)(i), and operating company described in subparagraph (C)(i). (C) Add any of the following to receive proceeds of the loan: (i) An eligible passive company, as defined by the Administrator. (ii) If an eligible passive company is added under clause (i), an operating company with respect to that eligible passive company. (D) Make typographical corrections to the address of any property with respect to which the loan is made. (E) Make typographical corrections to the name of any interim lender, third-party lender, or provider of funds described in subclause (I), (II), or (III) of section 502(3)(B)(i). (F) Make a guarantor a co-borrower or a co-borrower a guarantor. (G) Add a guarantor that does not have any ownership interest in the business seeking financing or project being financed under this section. (H) Reduce the amount of debt owed by the borrower before the closing as a result of regularly scheduled payments. (I) Reduce the cost of the project with respect to which the loan is made. (9) Accredited lender certified company defined In this section, the term accredited lender certified company means a certified development company that the Administration has designated as an accredited lender under such section 507(b).; and (2) by adding at the end the following: 511. Closing and oversight (a) SBA district counsels Beginning on the date that is 180 days after the date of enactment of this section, with respect to the program established under this title, district counsels of the Administration shall be subject to the same requirements, and shall have the same authority and responsibilities, as in effect with respect to that program on the day before the date of enactment of this section, except that— (1) the Office of Credit Risk Management of the Administration shall have the responsibility for all duties relating to conducting file reviews of loans reviewed and closed by a designated attorney under this title; and (2) district counsels of the Administration shall not have any responsibility relating to the review of closing packages with respect to a loan reviewed and closed by a designated attorney under this title. (b) Designated attorneys For the purposes of this title, the following definitions and requirements shall apply with respect to a designated attorney of a Priority certified development company: (1) The term designated attorney means a certified development company attorney that the Administrator has approved to close loans for a Priority certified development company. (2) The term Priority certified development company means a certified development company certified to participate on a permanent basis in the program to provide financings established under this title and that the Administrator has approved to participate in an expedited loan and debenture closing process. (3) A designated attorney shall be responsible for certifying documents relating to the closing of a loan made under this title if such designated attorney submits to the Administrator evidence that such designated attorney— (A) is licensed and in good standing to practice law in the State in which such loan is being closed; (B) has professional malpractice insurance coverage; and (C) has attended a training course on closing loans made under this title that is approved by the Administration..