DEFAULT: according to this communication, the borrower is in default if the borrower does not make a payment, is due in accordance with this note, or if the borrower: A) does not comply with a provision of that note, authorization and credit agreement or other credit documents; B) defaults on other SBA loans; C) sells or transfers or does not transfer or take into account the security or proceeds of these assets to the satisfaction of the SBA; D) does not disclose substantial facts to sBA or those acting on its behalf do not pass on substantial facts to SBA; E) a materially false or misleading representation of SBA, or any person acting on its behalf; (F) defaults on a loan or agreement with another creditor where the SBA believes that the default can significantly affect the borrower`s ability to pay that bill; G) do not pay taxes when payment is due; H) is the subject of bankruptcy or insolvency proceedings; I) has designated a beneficiary or liquidator for a portion of its business or property; J) a transfer to creditors; (K) any adverse change in financial situation or economic activity which, in the SBA`s view, may significantly affect the borrower`s ability to pay this bill; L) Dying; M) reorganizes, merges, consolidates or changes ownership or business structure without the prior written consent of SBA; or N) is the subject of civil or criminal action which, in the SBA`s view, can significantly affect the borrower`s ability to pay that bill. Your signature is your consent to the terms of the loan. “I have received your request and asked for clarification on certain conditions of the authorization and the credit agreement. It is important to note, when reading the agreement, that the conditions apply only to the borrower identified in this specific agreement as [the name of the company] and not as an officer`s name. The note, the terms of the guarantee agreement and the credit authorization agreement must be read in relation to the company or organization that recognizes and accepts the terms, not on the terms and not for individuals for loans under $200,000. This problem with the personal guarantee language in the FDI contract can split like hair, but it shows how important it is to read credit contracts for small businesses before signing them. It`s not always easy or enjoyable, but it`s important. No legal expert? Most of us are not. So if you commit your business or yourself to repay thousands of dollars, it`s a good idea to have a small business lawyer who can help you review the agreement. This is despite the fact that the CARES Act has waived the personal guarantee for smaller loans, with the following language: the borrower will use all the proceeds of this loan exclusively as working capital to relieve the economic damage caused by the disaster of month 31. In 2020 and beyond, and for loans of more than $25,000 for the payment of Single Code of Trade (UCC) and $100 UCC processing fees by third parties deducted from the aforementioned loan amount. The FDI loan agreement (which you can read here in its entirety) currently indicates that the SBA strongly recommends the use of the online credit application, which can be found under disasterloan.sba.gov/ela/.
You can apply for free help from Wisconsin SBDC. “With respect to a loan under Section 7, point b) 2), the Small Business Act (15 U.S.C 636 (b) (2)) in response to Covid-19 during the period covered, The administrator renounces this: “Without the prior written agreement of the SBA, the borrower will not distribute the borrower`s assets or grant preferential treatment, make an advance directly or indirectly through loans, gifts, bonuses or in any other way to an owner or partner or one of its employees or to a company controlled directly or indirectly or related to the borrower or another business.” The applicant has a maximum of 6 months to reactivate his approved loan. It is likely that this requirement does not apply in all cases, for example. B for less tai loans