Loans Deferment Guidelines

Loan Deferment Guidelines       

Deferment Guideline

At least 30 days prior written notice is required for ALL deferments related to financial issues.

The Borrower(s)/Guarantor(s)/Owner(s) will provide the following:

1. Letter of request signed by all owners/borrowers/guarantors. Include in the letter:
   • reasons for the request
   • advantages to the business for approval of request
   • terms of deferment request. Generally, a deferment must not be for more than 6 months in the future. No single deferment action can exceed one (1) year of future payments. A one (1) year deferment should be used only when absolutely necessary and with strong justification
   • ability to bring the loan current within a maximum of 60 months after deferment, include cash flow projections with explanation of projections
2. SBA form 413, Personal financial statement of each owner/borrower/guarantor. If married, spouse must sign form.
3.  Most recent Federal tax return of each owner/borrower/guarantor.
4. Debt Schedule for each owner/borrower/guarantor.
5. Most recent Federal tax return for all business entities.
6. Income statement and balance sheet of all business entities: last year end and interim.
7. Debt Schedule of project business.
8. Monthly Income Statement during Deferment Period greater than six months.
9. Monthly Cash Flow Statement during Deferment Period greater than six months.
10. Photographs of any damage.
11. Status & file number of any Federal funds/programs for which you have applied.
12. Status and application of any insurance claim.
13. Listing Contract and/or Purchase Agreement.
14. Prior Lien Holder’s opinion to include balance and loan status. Copy of agreement with Prior Lien Holder for any adjustments to prior lien. (Lender holding first  mortgage)

ACDC will verify (borrower will bring current if deficiency found):

1. Required life insurance must be in force
2. UCC current
3. Current year end information: financial statements, employee count, verification of hazard insurance, verification of property tax paid
4. Current franchise agreement (if applicable)
5. Bank’s current information

Please be advised:

• Interest will continue to accrue during any period of deferment.
• When payments resume, they are applied to the loan in the following order: accrued fees until current, interest until current, principal until current, late fees
• If a catch-up payment is missed or late, the loan status will change from catch-up to active and all deferred balances will be immediately due.
• If a loan was in default when a deferment was approved, and the borrower is unable to resume payments as specified in the catch-up plan, the loan will be reclassified as being “in default”
• The catch-up amount will be made until the loan is brought current with the original amortization schedule.
• Additional payments may be made on the deferred amount at any time during the catch-up period to bring the loan current.

The Guideline for Deferment is provided to assist you, the borrower and us, the CDC. Actual information required may vary depending on the exact circumstances of your request. We are willing to work with you within the SBA 504 loan program statutes and regulations.