83 FR 19921 - Express Bridge Loan Pilot Program; Modification of Fee Policy
SMALL BUSINESS ADMINISTRATION Federal Register Volume 83, Issue 88 (May 7, 2018)
Federal Register Volume 83, Issue 88 (May 7, 2018)
| Page Range | 19921-19922 | |
| FR Document | 2018-09627 |
[Federal Register Volume 83, Number 88 (Monday, May 7, 2018)] [Rules and Regulations] [Pages 19921-19922] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-09627] ----------------------------------------------------------------------- SMALL BUSINESS ADMINISTRATION 13 CFR Part 120 Express Bridge Loan Pilot Program; Modification of Fee Policy AGENCY: U.S. Small Business Administration. ACTION: Notification of change to Express Bridge Loan Pilot Program and impact on regulatory provision. ----------------------------------------------------------------------- SUMMARY: On October 16, 2017, the U.S. Small Business Administration (SBA) published a document announcing the Express Bridge Loan Pilot Program (Express Bridge Pilot). In that document, SBA provided an overview of the Express Bridge Pilot and modified an Agency regulation relating to loan underwriting for loans made under the Express Bridge Pilot. SBA continues to refine and improve the design of the Express Bridge Pilot and is issuing this document to revise the program requirements, including the modification of an Agency regulation relating to fees that can be collected from the Applicant or Borrower in connection with a loan made under the Express Bridge Pilot. DATES: The revised program requirements described in this document apply to all Express Bridge Pilot loans approved on or after May 7, 2018, and the Express Bridge Pilot will remain available through September 30, 2020. FOR FURTHER INFORMATION CONTACT: Dianna Seaborn, Director, Office of Financial Assistance, U.S. Small Business Administration, 409 Third Street SW, Washington, DC 20416; Telephone (202) 205-3645; email address: [email protected]. SUPPLEMENTARY INFORMATION: On October 16, 2017, SBA published a document announcing the Express Bridge Pilot. (82 FR 47958) The Express Bridge Pilot is designed to supplement the Agency's disaster response capabilities and authorizes the Agency's 7(a) Lenders with SBA Express lending authority to deliver expedited SBA-guaranteed financing on an emergency basis for disaster-related purposes to small businesses located in communities impacted by a Presidentially-declared disaster, while the businesses apply for and await long-term financing (including through SBA's direct disaster loan program, if eligible). The Express Bridge Pilot applies the policies and procedures in place for the Agency's SBA Express program, except as outlined in the Federal Register document published on October 16, 2017. Pursuant to the authority provided to SBA under 13 CFR 120.3 to suspend, modify or waive certain regulations in establishing and testing pilot loan initiatives, SBA modified the regulation at 13 CFR 120.150 (``What are SBA's lending criteria?''), which applies to loans made in the 7(a) Business Loan Program. SBA modified the regulation in order to minimize the burdens on the businesses applying for loans through the Express Bridge Pilot and to expand the opportunities for SBA Express lenders to participate in the pilot. SBA continues to refine and improve the design of the Express Bridge Pilot and, therefore, is issuing this document to clarify the fees that Lenders or third parties are able to collect from Applicants or Borrowers in connection with loans made under the pilot. All Express Bridge Pilot loans are subject to the same upfront guaranty fees required for 7(a) loans of similar size and maturity as set forth in 13 CFR 120.220. In addition, all Express Bridge Pilot loans are subject to the same Lender's annual service fee required for all 7(a) loans as set forth in 13 CFR 120.220(f). In order to ensure that Applicants and Borrowers are charged only those additional fees reasonably necessary in connection with an Express Bridge Pilot loan, SBA is modifying the regulation at 13 CFR 120.221 (``Fees and expenses which the Lender may collect from a loan applicant or Borrower''), using the term modify as contemplated under 13 CFR 120.3, to permit Lenders to collect only the following: [[Page 19922]] 1. Lender Fees: An SBA Express Lender must not impose any fees or direct costs on an Express Bridge Pilot Applicant or Borrower, except for the following: a. Application Fee: SBA Express Lenders may charge an Express Bridge Pilot Applicant an application fee. The maximum permissible application fee is 2% of the loan amount or $250, whichever is greater. If an application fee is charged, it must be disclosed on SBA Form 159(7a), Fee Disclosure Form and Compensation Agreement for Agent Services in Connection with a SBA 7(a) Loan. If an undisbursed loan is canceled, the Lender may retain the application fee; b. Late Payment Fee: A late payment fee not to exceed 5 percent of the scheduled Express Bridge Pilot loan payment; and c. Liquidation Costs: The reasonable direct costs of liquidation. 2. Prohibition on all other fees and charges, including by loan packagers, referral agents or brokers. Except as permitted in 1. above, no other fee or costs may be charged to an Express Bridge Pilot Applicant or Borrower by the Lender. In addition, no fee or costs may be charged to an Express Bridge Pilot Applicant or Borrower by any third party in connection with an Express Bridge Pilot loan, including any referral fee, broker's fee, or similar fee. The modification of this regulation will permit SBA Express lenders to recoup some of their costs in processing the application, without subjecting the Applicant to excessive or unnecessary fees for these small guaranteed loans that are intended to provide immediate cash to assist the small business with rebuilding and continuing or restarting its operations while awaiting long-term disaster financing. SBA believes that the costs of the program should be kept as low as possible to aid the disaster-affected small business. The application fee is optional; therefore an SBA Express Lender may choose not to collect an application fee from an Express Bridge Pilot Applicant. Additionally, because an Express Bridge Pilot loan Applicant must have had an existing banking relationship with the SBA Express lender, there is no need for either the Applicant or the Lender to pay a referral fee, broker's fee, or similar fee for these loans. SBA's modification of 13 CFR 120.221 is authorized by 13 CFR 120.3 of its regulations, which provides that the SBA Administrator may suspend, modify or waive rules for a limited period of time to test new programs or ideas. This modification applies only to loans made under the Express Bridge Pilot and will last only for the duration of the pilot, which expires September 30, 2020. As part of the Express Bridge Pilot, this modification applies only to those small businesses that were located, as of the date of the applicable disaster, in counties that have been Presidentially-declared as disaster areas, plus any contiguous counties. A listing of Presidentially-declared disaster declarations, including primary and contiguous counties can be located at www.sba.gov/disaster. All other SBA terms and conditions and regulatory waivers related to the Express Bridge Pilot remain unchanged. SBA will provide more detailed guidance in the form of a program guide, which will be available on SBA's website, http://www.sba.gov. SBA may also provide additional guidance, if needed, through SBA notices, which also will be published on SBA's website, http://www.sba.gov. Authority: 15 U.S.C. 636(a)(25); 13 CFR 120.3. Dated: April 26, 2018. Linda E. McMahon, Administrator. [FR Doc. 2018-09627 Filed 5-4-18; 8:45 am] BILLING CODE 8025-01-P
![Federal Register / Vol. 83, No. 88 / Monday, May 7, 2018 / Rules and Regulations 19921
Eligible Business Expense, except debt (i.e., in the months prior to and after the Financial Assistance, U.S. Small
that was incurred with a credit card or modification or refinancing), the Business Administration, 409 Third
a business line of credit may be Borrower was current on all payments Street SW, Washington, DC 20416;
included if the credit card or business due, there have been no deferments of Telephone (202) 205–3645; email
line of credit is issued in the name of any payments, and no additional address: dianna.seaborn@sba.gov.
the small business and the Applicant proceeds were advanced through the SUPPLEMENTARY INFORMATION: On
certifies that the debt being refinanced modification or refinancing (except to October 16, 2017, SBA published a
was incurred exclusively for business cover closing costs). * * * document announcing the Express
related purposes. Loan proceeds must * * * * * Bridge Pilot. (82 FR 47958) The Express
not be used to refinance any personal Refinancing Project means the fair Bridge Pilot is designed to supplement
expenses. Both the CDC and the market value of the Eligible Fixed the Agency’s disaster response
Borrower must certify in the application Asset(s) securing the qualified debt and capabilities and authorizes the Agency’s
that the funds will be used to cover any other fixed assets acceptable to 7(a) Lenders with SBA Express lending
Eligible Business Expenses. * * * SBA, except that if the Refinancing authority to deliver expedited SBA-
* * * * * Project includes the financing of Eligible guaranteed financing on an emergency
(12) The 504 loans approved under Business Expenses, SBA will not accept basis for disaster-related purposes to
this paragraph (g) must be disbursed as collateral any fixed assets other than small businesses located in
within 9 months after loan approval. the Eligible Fixed Asset(s) securing the communities impacted by a
The Director, Office of Financial Qualified Debt. Presidentially-declared disaster, while
Assistance, or his or her designee, may * * * * * the businesses apply for and await long-
approve a request for extension of the term financing (including through
Dated: April 26, 2018.
disbursement period for an additional 6 SBA’s direct disaster loan program, if
months for good cause. Linda E. McMahon,
eligible).
Administrator. The Express Bridge Pilot applies the
* * * * *
(15) * * * [FR Doc. 2018–09638 Filed 5–4–18; 8:45 am] policies and procedures in place for the
Qualified debt is a commercial loan: BILLING CODE 8025–01–P Agency’s SBA Express program, except
* * * as outlined in the Federal Register
(i) * * * A commercial loan that was document published on October 16,
refinanced within the two years prior to SMALL BUSINESS ADMINISTRATION 2017. Pursuant to the authority
the date of application (the most recent provided to SBA under 13 CFR 120.3 to
loan) may be deemed incurred not less 13 CFR Part 120
suspend, modify or waive certain
than 2 years before the date of the Express Bridge Loan Pilot Program; regulations in establishing and testing
application provided that the effect of Modification of Fee Policy pilot loan initiatives, SBA modified the
the most recent loan was to extend the regulation at 13 CFR 120.150 (‘‘What are
maturity date without advancing any AGENCY: U.S. Small Business SBA’s lending criteria?’’), which applies
additional proceeds (except to cover Administration. to loans made in the 7(a) Business Loan
closing costs) and the collateral for the ACTION: Notification of change to Program. SBA modified the regulation
most recent loan includes, at a Express Bridge Loan Pilot Program and in order to minimize the burdens on the
minimum, the same Eligible Fixed impact on regulatory provision. businesses applying for loans through
Asset(s) that served as collateral for the the Express Bridge Pilot and to expand
former loan that was refinanced. The SUMMARY: On October 16, 2017, the U.S. the opportunities for SBA Express
loan documents and lien instruments Small Business Administration (SBA) lenders to participate in the pilot.
for the most recent loan, as well as the published a document announcing the SBA continues to refine and improve
loan documents and lien instruments Express Bridge Loan Pilot Program the design of the Express Bridge Pilot
for the loan that was replaced by the (Express Bridge Pilot). In that document, and, therefore, is issuing this document
most recent loan, must be submitted to SBA provided an overview of the to clarify the fees that Lenders or third
SBA as part of the application. Express Bridge Pilot and modified an parties are able to collect from
* * * * * Agency regulation relating to loan Applicants or Borrowers in connection
(vii) * * * For the purposes of this underwriting for loans made under the with loans made under the pilot. All
paragraph (vii), ‘‘current on all Express Bridge Pilot. SBA continues to Express Bridge Pilot loans are subject to
payments due’’ means that no payment refine and improve the design of the the same upfront guaranty fees required
was more than 30 days past due from Express Bridge Pilot and is issuing this for 7(a) loans of similar size and
either the original payment terms or document to revise the program maturity as set forth in 13 CFR 120.220.
modified payment terms (whether requirements, including the In addition, all Express Bridge Pilot
through a modification to an existing modification of an Agency regulation loans are subject to the same Lender’s
Note or through a refinancing that relating to fees that can be collected annual service fee required for all 7(a)
results in a new Note). The modification from the Applicant or Borrower in loans as set forth in 13 CFR 120.220(f).
(or refinancing) must have been agreed connection with a loan made under the In order to ensure that Applicants and
to in writing by the Borrower and the Express Bridge Pilot. Borrowers are charged only those
lender of the existing debt no less than DATES: The revised program additional fees reasonably necessary in
one year preceding the date of requirements described in this connection with an Express Bridge Pilot
application, except that a modified (or document apply to all Express Bridge loan, SBA is modifying the regulation at
daltland on DSKBBV9HB2PROD with RULES
refinanced) loan may be allowed if the Pilot loans approved on or after May 7, 13 CFR 120.221 (‘‘Fees and expenses
purpose of the modification (or 2018, and the Express Bridge Pilot will which the Lender may collect from a
refinancing) was to extend the maturity remain available through September 30, loan applicant or Borrower’’), using the
date of the loan, including any balloon 2020. term modify as contemplated under 13
payment, and if, during the one year FOR FURTHER INFORMATION CONTACT: CFR 120.3, to permit Lenders to collect
period prior to the date of application Dianna Seaborn, Director, Office of only the following:
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![19922 Federal Register / Vol. 83, No. 88 / Monday, May 7, 2018 / Rules and Regulations
1. Lender Fees: An SBA Express Pilot and will last only for the duration DATES: This AD is effective June 11,
Lender must not impose any fees or of the pilot, which expires September 2018.
direct costs on an Express Bridge Pilot 30, 2020. As part of the Express Bridge The Director of the Federal Register
Applicant or Borrower, except for the Pilot, this modification applies only to approved the incorporation by reference
following: those small businesses that were of certain publications listed in this AD
a. Application Fee: SBA Express located, as of the date of the applicable as of June 11, 2018.
Lenders may charge an Express Bridge disaster, in counties that have been ADDRESSES: For service information
Pilot Applicant an application fee. The Presidentially-declared as disaster areas, identified in this final rule, contact
maximum permissible application fee is plus any contiguous counties. A listing Gulfstream Aerospace Corporation, P.O.
2% of the loan amount or $250, of Presidentially-declared disaster Box 2206, Savannah, Georgia 31402–
whichever is greater. If an application declarations, including primary and 2206; telephone: (800) 810–4853; fax
fee is charged, it must be disclosed on contiguous counties can be located at 912–965–3520; email: pubs@
SBA Form 159(7a), Fee Disclosure Form www.sba.gov/disaster. gulfstream.com; internet: http://
and Compensation Agreement for Agent All other SBA terms and conditions www.gulfstream.com/product_support/
Services in Connection with a SBA 7(a) and regulatory waivers related to the technical_pubs/pubs/index.htm. You
Loan. If an undisbursed loan is Express Bridge Pilot remain unchanged. may view this service information at the
canceled, the Lender may retain the SBA will provide more detailed FAA, Policy and Innovation Division,
application fee; guidance in the form of a program 901 Locust, Kansas City, Missouri
b. Late Payment Fee: A late payment guide, which will be available on SBA’s 64106. For information on the
fee not to exceed 5 percent of the website, http://www.sba.gov. SBA may availability of this material at the FAA,
scheduled Express Bridge Pilot loan also provide additional guidance, if call (816) 329–4148. It is also available
payment; and needed, through SBA notices, which on the internet at http://
c. Liquidation Costs: The reasonable also will be published on SBA’s
direct costs of liquidation. www.regulations.gov by searching for
website, http://www.sba.gov. and locating Docket No. FAA–2017–
2. Prohibition on all other fees and
charges, including by loan packagers, Authority: 15 U.S.C. 636(a)(25); 13 CFR 1163.
120.3.
referral agents or brokers. Except as Examining the AD Docket
permitted in 1. above, no other fee or Dated: April 26, 2018.
Linda E. McMahon, You may examine the AD docket on
costs may be charged to an Express
Bridge Pilot Applicant or Borrower by the internet at http://
Administrator.
the Lender. In addition, no fee or costs www.regulations.gov by searching for
[FR Doc. 2018–09627 Filed 5–4–18; 8:45 am]
may be charged to an Express Bridge and locating Docket No. FAA–2017–
BILLING CODE 8025–01–P
Pilot Applicant or Borrower by any 1163; or in person at Docket Operations
third party in connection with an between 9 a.m. and 5 p.m., Monday
Express Bridge Pilot loan, including any through Friday, except Federal holidays.
DEPARTMENT OF TRANSPORTATION The AD docket contains this final rule,
referral fee, broker’s fee, or similar fee.
The modification of this regulation the regulatory evaluation, any
Federal Aviation Administration
will permit SBA Express lenders to comments received, and other
recoup some of their costs in processing information. The address for Docket
14 CFR Part 39
the application, without subjecting the Operations (phone: 800–647–5527) is
Applicant to excessive or unnecessary [Docket No. FAA–2017–1163; Product Docket Operations, U.S. Department of
Identifier 2017–CE–041–AD; Amendment Transportation, Docket Operations, M–
fees for these small guaranteed loans 39–19260; AD 2018–09–04]
that are intended to provide immediate 30, West Building Ground Floor, Room
cash to assist the small business with RIN 2120–AA64 W12–140, 1200 New Jersey Avenue SE,
rebuilding and continuing or restarting Washington, DC 20590.
its operations while awaiting long-term Airworthiness Directives; Gulfstream FOR FURTHER INFORMATION CONTACT:
disaster financing. SBA believes that the Aerospace Corporation Airplanes William O. Herderich, Aerospace
costs of the program should be kept as AGENCY: Federal Aviation Engineer, Atlanta ACO Branch, FAA,
low as possible to aid the disaster- Administration (FAA), DOT. 1701 Columbia Avenue, College Park,
affected small business. The application ACTION: Final rule.
Georgia 30337; phone: (404) 474–5547;
fee is optional; therefore an SBA fax: (404) 474–5605; email:
Express Lender may choose not to SUMMARY: We are adopting a new william.o.herderich@faa.gov.
collect an application fee from an airworthiness directive (AD) for certain SUPPLEMENTARY INFORMATION:
Express Bridge Pilot Applicant. Gulfstream Aerospace Corporation
Additionally, because an Express Bridge Models G–IV and GIV–X airplanes. This Discussion
Pilot loan Applicant must have had an AD was prompted by the potential for We issued a notice of proposed
existing banking relationship with the fatigue cracks developing in the main rulemaking (NPRM) to amend 14 CFR
SBA Express lender, there is no need for landing gear actuator attachment fitting part 39 by adding an AD that would
either the Applicant or the Lender to that had a certain repair incorporated. apply to certain Gulfstream Aerospace
pay a referral fee, broker’s fee, or similar This AD requires incorporating new Corporation Models G–IV and GIV–X
fee for these loans. revisions into the Instructions for airplanes. The NPRM published in the
SBA’s modification of 13 CFR 120.221 Continued Airworthiness of the Federal Register on December 12, 2017
is authorized by 13 CFR 120.3 of its Limitations section of the FAA- (82 FR 58362). The NPRM was
daltland on DSKBBV9HB2PROD with RULES
regulations, which provides that the approved maintenance program (e.g., prompted by the potential for fatigue
SBA Administrator may suspend, maintenance manual) that establish an cracks developing in the main landing
modify or waive rules for a limited inspection cycle for the repaired MLG gear actuator attachment fitting that had
period of time to test new programs or side brace actuator fittings. We are a certain repair incorporated. The
ideas. This modification applies only to issuing this AD to address the unsafe NPRM proposed to require
loans made under the Express Bridge condition on these products. incorporating new revisions into the
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Document Created: 2018-05-05 02:48:11
Document Modified: 2018-05-05 02:48:11
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Notification of change to Express Bridge Loan Pilot Program and impact on regulatory provision. | |
| Dates | The revised program requirements described in this document apply to all Express Bridge Pilot loans approved on or after May 7, 2018, and the Express Bridge Pilot will remain available through September 30, 2020. | |
| Contact | Dianna Seaborn, Director, Office of Financial Assistance, U.S. Small Business Administration, 409 Third Street SW, Washington, DC 20416; Telephone (202) 205-3645; email | |
| FR Citation | 83 FR 19921 |
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