“What’s in a name?” I can’t help myself. Names meant a lot to Romeo and Juliet. Names mean a lot to parents of newborns, too. And would you believe … even my house goes by a name that means a lot to folks in this town.
You see, I bought my house from a well-known minister. And I quickly learned to refer to my house as “The Wilson House” as in, “Where do you live, Richard?” “Oh, I bought the Wilson House,” Everybody in town knows where that house is. I’m not sure, but after ten years I doubt anyone calls it “The Jeffrey House.” Wilson it was and Wilson it shall remain, I suppose.
When the bank financed my purchase, it gave the loan file my last name, of course. I am the borrower. It is my loan. And it’s my house, despite what people around here may call it. When the file is up for review, the auditor asks for the “Jeffrey file.” Easy, right? And like consumer loans, commercial loans are given the name of the borrower.
But it’s not that easy for SBA lenders. So many “What ifs?” After all, SBA finances businesses, not individuals. So the name of the business is the first thing to know in naming the loan. But which business? The EPC is the borrower. Is the loan file named after the borrower? Or are we to name the loan after the OC? And what if the EPC does business under another name, like a DBA? What if the individual as a sole proprietorship is the borrower, ala John Smith dba Smith Restaurant? What’s the name of that file? Ah, the iterations are endless!
Thankfully, SBA felt our pain and issued directions for naming SBA loans. These were included in both the 504 and 7(a) Authorization boilerplates. Although Authorizations are no more, the naming convention in those boilerplates is still used to produce the Terms and Conditions.
The SBA loan name is the first available from this list:
- dba of the Operating Company
- name of the Operating Company
- dba of the Borrower
- name of the Borrower
In the case of multiple Borrowers or Operating Companies, apply the same rule using the first Borrower or Operating Company listed by the loan officer.
Avoid sending your SBA Department on a scavenger hunt looking for loan files. Follow the SBA loan name convention.
Richard Jeffrey
Senior Associate
richard@jrbrunoassoc.com
www.jrbrunoassoc.com