Att3-SOW-CSAUserManual.pdf

Central Servicing Agent____________

User Manual April 30, 2009

Development Company Funding Corporation 2009

Fees on 504 loans __________________________ Overview

Loan Approval

Date

Third Party Lender Participation Fee

(one-time fee)

Borrower SBA Fee

(ongoing fee)

Minimum CDC Servicing Fee

CSA Fee

10-01-96 through 09-30-97 one-half of one percent of senior lien $

0.50% seven-eighths of one percent

0.875% five-eighths of one percent

0.625% one-tenth

0.100%

10-01-97

09-30-98 thirty-one fortieths of one

0.775%

10-01-98

09-30-99 seven hundred twenty-nine thousandths of

0.729%

10-01-99

09-30-00 six tenths of one

0.600%

10-01-00

09-30-01 four hundred seventy-two

0.472%

10-01-01

09-30-02 four hundred ten

0.410%

10-01-02

09-30-03 four hundred twenty-five

0.425%

10-01-03

09-30-04 three-hundred ninety-three

0.393%

10-01-04

09-30-05 two-hundred eighty-eight

0.288%

10-01-05

09-30-06

0.50% one-hundred ninety-two thousands of one

0.192%

10-01-06

09-30-07

0.50% eighteen

0.018%

10-01-07

09-30-08

0.50% twenty-one

0.021%

10-01-08

09-30-09

0.50% zero 0%

CSA User Manual – April 2009 Chapter 1

Introduction

Purpose of the CSA User Manual 2 Role of the Central Servicing Agent 4 Who’s Who – Colson Services Corp. 5 Who’s Who – Little Rock Commercial Servicing Center 6 Who’s Who – Fresno Commercial Servicing Center 8 Contacting Colson and DCFC 10 Contacting SBA Loan Servicing Centers 11 Contacting SBA Central Office 12 Wiring Instructions 13

Purpose of the CSA User Manual_________________________

This manual is created to assist Certified Development Company (CDC) staff and U.S.

Small Business Administration (SBA) staff with information that relates to the involvement and responsibilities of the Central Servicing Agent (CSA) for the 503 and 504 Loan Programs. It is for those who work with closing, funding and servicing 503 and 504 loans.

Throughout this manual, the CSA is referred to as COLSON. Occasionally you’ll find the phrase Central Servicing Agent or CSA instead of “COLSON”.

The manual is designed as a handbook for users. It gives directions, explanations and background information telling what you should know about various topics, sample letters, reference information, and methods to follow to perform your job more effectively.

We’ve made every effort to provide the latest information in all areas. SBA Notices, changes to the SOPs and regulations, and industry information noting changes occur and NADCO sends these to you periodically. Regulations, SBA Notices and SOPs are also available on SBA’s web site at http:/www.sba.gov/banking and NADCO’s website http://www.nadco.org.

If you have comments or suggestions about this manual, please contact the Program Manager of the Development Company Funding Corporation.

Phone: 703-748-2580

Fax: 703-748-2582 http://www.nadco.org/

Role of the Central Servicing Agent (CSA)_________________ COLSON Services Corp.

COLSON is under contract with the SBA to serve as the CSA for the 504 Loan Program.

It is the designated CSA for the CDC and the borrower that has a 503 or 504 loan.

It plays a part in the debenture funding, loan repayment, servicing actions affecting loan repayment, prepayment of 503 and 504 loans, and SBA’s purchase of the 503 and 504 debentures. In that capacity, COLSON is obligated to:

1. Receive, examine, process, complete and distribute closing documents needed to process the monies from the debenture funding.

2. Receive and disburse proceeds from the debenture funding as instructed on the

Servicing Agent Agreement.

3. Receive monthly payments from the borrower, then distribute and invest funds as instructed by SBA.

4. Make the semi-annual debenture payments to the trustee for the investors.

5. Establish and maintain a computerized accounting and information reporting system.

6. Make the computerized reporting system accessible to SBA and CDCs through data communication links.

7. Prepare and provide reports to SBA and CDCs on the performance of loans.

COLSON Services Corp. works with CDCs on:

• Funding

• Payments and Prepayments

• Servicing Actions

• Reports

• Web Site

Role of the Central Servicing Agent (CSA)_________________ Working with your COLSON Customer Service Representative

A staff of COLSON Customer Service Representatives is available to assist CDCs and SBA. Here are some points to keep in mind to make the relationship work smoothly:

• There are times when a question can be answered or a problem solved over the telephone. At other times, faxed correspondence is needed. Documents with original signatures may need to be sent via an express delivery service. Your Customer Service Representative will tell you the document needed and how it must be sent.

• Changes to reports, statements, ACH information, etc., must be sent to COLSON in writing. These changes cannot be handled over the telephone.

• Requests are generally processed in the order in which they are received.

• There are certain requests that are considered priority items. ACH changes and prepayment requests are two that are treated as priority items.

• If you receive an “URGENT” fax or e-mail or are called about a problem, you need to act immediately! This is especially important if it relates to a debenture funding, a missed loan payment or any other problem with a crucial deadline.

Your delay may cost the borrower money or cause a debenture funding to be missed. By not acting promptly, you may place your CDC at legal and financial risk.

• As a rule, the Customer Service Representatives will follow-up by calling you back with the status of a request or to tell you that a problem has been resolved. If a request will take a longer period of time to complete, you will be told how long it might take.

• COLSON is part of a team of knowledgeable professionals that successfully assist

CDCs to close, fund and service 503 and 504 loans.

One point to keep in mind

Neither COLSON nor its staff is there to replace a CDC’s obligation to service its loan portfolio. You, the CDC, are responsible for all direct contact with the borrower. COLSON’s role is to assist the CDC in doing its job better.

Who’s Who at COLSON Services Corp. with Contact Information

COLSON Services Corp. 503/504 Team

Mailing Colson Services Corp.

504 Loan Department P.O. Box 1289 Bowling Green Station New York, NY 10274

Overnight Delivery & Street Mail Colson Services Corp.

504 Loan Department 101 Barclay Street; 8th Floor East New York, NY 10286

Telephone: 800-225-4285 Fax I: 212-313-0148 Fax II: 212-313-0163 Email: 504department@colsonservices.com website: www.colsonservices.com

504 Department at Colson Services Rich Ventura 212-815-4749 mailto:504department@colsonservices.com

Who’s Who at SBA_____________________________________ Little Rock Commercial Servicing Center 503/504 Team

Little Rock Commercial Loan Servicing Center 2120 Riverfront Drive Suite 100 Little Rock, AR 72202 Telephone: 501-324-5871 Fax: 501-292-3878 Email: lrsc.servicing@sba.gov

Table 1-1: Little Rock Commercial Servicing Center 503/504 Team

Office of Center Director Director Nique Carrington Ext. 281 charla.carrington@sba.gov Information Resource Mgr. Michael Probus Ext. 300 michael.probus@sba.gov

Office of Center Counsel Chief Center Counsel Joe Bures Ext. 299 joseph.bures@sba.gov Paralegal Specialist Izora Harris Ext. 271 izora.harris@sba.gov Attorney/Advisor Denise Graham Ext. 265 denise.graham@sba.gov Attorney/Advisor Zane Wilson Ext. 267 nickolas.wilson@sba.gov Attorney/Advisor Joanne Saberre Ext. 234 joanne.saberre@sba.gov

Loan Servicing – Fax: (202) 292-3878; e-mail: (lrsc.servicing@sba.gov) Supervisory Loan Specialist Wayne Reid Ext. 248 russell.reid@sba.gov Loan Specialist Johnnie Green Ext. 233 johnnie.green@sba.gov Loan Specialist Mike Taylor Ext. 256 Michael.v.taylor@sba.gov Loan Specialist Velma Hardin Ext. 270 velma.hardin@sba.gov Loan Specialist Beverly Smith Ext. 292 beverly.smith@sba.gov Loan Specialist Linda Stowe Ext. 306 linda.stowe@sba.gov Loan Specialist Rose Frazier Ext. 295 rose.frazier@sba.gov Loan Servicing Assistant Jody Young Ext. 254 jody.young@sba.gov Loan Servicing Assistant Cindi Cooper Ext. 252 Cynthia.cooper@sba.gov Loan Servicing Assistant Tyler Matlock Ext. 243 tyler.matlock@sba.gov Loan Servicing Assistant Jennifer Williams Ext. 296 jmwillia@sba.gov

Express Purchase – Fax: (202) 292-3877; e-mail (lrsc.expresspurchase@sba.gov) Supervisory Loan Specialist Jerry Johnson Ext. 276 Gerald.johnson@sba.gov Loan Servicing Assistant Eduardo Maglione Ext. 283 Eduardo.maglione@sba.gov Loan Servicing Assistant Shirley Walls Ext. 308 Shirley.walls@sba.gov Loan Servicing Assistant Meghan Hudson Ext. 288 Meghan.hudson@sba.gov Loan Servicing Assistant Deitra Neely Ext. 222 deitra.neely@sba.gov Loan Servicing Assistant Bobbie Hill Ext. 245 bobbie.hill@sba.gov Loan Servicing Assistant Justin Martin Ext. 280 Justin.martin@sba.gov Loan Servicing Assistant Robin Green Ext. 253 robin.green@sba.gov Loan Servicing Assistant Veronica Kirtley Ext. 232 veronica.kirtley@sba.gov Loan Servicing Assistant Victor Okyere Ext. 261 emmanuel.okyere@sba.gov Loan Servicing Assistant Petra Reich Ext. 260 petra.reich@sba.gov Loan Servicing Assistant Abigail Swalls Ext. 262 Abigail.swalls@sba.gov mailto:lrsc.servicing@sba mailto:charla.carrington@sba.gov mailto:izora.harris@sba.gov mailto:denise.graham@sba.gov mailto:rose.frazier@sba.gov mailto:jody.young@sba.gov mailto:Cynthia.cooper@sba.gov mailto:tyler.matlock@sba.gov mailto:Gerald.johnson@sba.gov mailto:Eduardo.maglione@sba.gov mailto:Shirley.walls@sba.gov mailto:Meghan.hudson@sba.gov mailto:deitra.neely@sba.gov mailto:bobbie.hill@sba.gov mailto:Justin.martin@sba.gov mailto:robin.green@sba.gov mailto:veronica.kirtley@sba.gov mailto:emmanuel.okyere@sba.gov mailto:petra.reich@sba.gov

Express Purchase – Fax: (202) 292-3877; e-mail (lrsc.expresspurchase@sba.gov) Loan Servicing Assistant Shenita Cunningham Ext. 255 shenita.cunningham@sba.gov Loan Servicing Assistant Ryan Davenport Ext. 251 ryan.davenport@sba.gov Loan Servicing Assistant Allen Samuel Ext. 266 allen.samuel@sba.gov Loan Servicing Assistant Christopher Perry Ext. 289 Christopher.perry@sba.gov Loan Servicing Assistant Ronita Greer Ext. 258 ronita.greer@sba.gov

504 Liquidation – Fax: (202) 741-6930; e-mail (lrsc.504liquidation@sba.gov) Supervisory Loan Specialist Hollis Carter Ext. 264 hollis.carter@sba.gov Loan Specialist Steve Clark Ext. 298 steve.clark@sba.gov Loan Specialist Bruce Duston Ext. 290 bruce.duston@sba.gov Loan Specialist Vickie Welch Ext. 284 Vickie.welch@sba.gov Loan Specialist Kenneth McKay Ext. 291 Kenneth.mckay@sba.gov Loan Liquidation Assistant Gail Schulte Ext. 228 gail.schulte@sba.gov mailto:shenita.cunningham@sba.gov mailto:ryan.davenport@sba.gov mailto:allen.samuel@sba.gov mailto:Christopher.perry@sba.gov mailto:steve.clark@sba.gov mailto:bruce.duston@sba.gov mailto:Vickie.welch@sba.gov mailto:Kenneth.mckay@sba.gov

Who’s Who at SBA_____________________________________ Fresno Commercial Servicing Center 503/504 Team

Fresno Commercial Loan Servicing Center 2719 North Air Fresno Drive Suite 107 Fresno, CA 93727-1547 Telephone: 559-487-5136 800-347-0922 (for servicing requests status, select option 4) Fax: 559-487-5803 Email: fsc.servicing@sba.gov (For any Servicing issue) fsc.purchasing@sba.gov (For any Liquidation issue)

Table 1-2: Fresno Commercial Servicing Center 503/504 Team

Center Management Team Director Joel Stiner Ext 215 joel.stiner@sba.gov Deputy Center Director Vacant Chief Center Counsel G. Scott FitzGibbon Ext 234 scott.fitzbiggon@sba.gov Administrative Officer Elisa Mendoza Ext 221 elisa.mendoz@sba.gov Asst Ctr Dir for Servicing Michelle Serrano Ext 212 michelle.serrano@sba.gov Asst Ctr Dir for SBAExpress Purchases

Gary Wamhof Ext 227 gary.wamhof@sba.gov

Asst Ctr Dir for 504 Liquidation Leslie Niswander Ext 225 leslie.niswander@sba.gov

Legal Team Staff Attorney Christian Jinkerson Ext 230 Christian.jinkerson@sba.gov Staff Attorney G. Scott FitzGibbon Ext 234 scott.fitzbiggon@sba.gov

Servicing/Customer Service and Collections

Supervisory Loan Specialist Michelle Serrano Ext 212 michelle.serrano@sba.gov Financial Analyst Daniel Urdesich Ext 223 Daniel.urdesich@sba.gov Loan Specialist Elodia Castro Ext 214 elodia.castro@sba.gov Loan Specialist Olivia Fraijo Ext 219 Olivia.fraijo@sba.gov Loan Specialist Tim Sabbatini Ext 231 tim.sabbatini@sba.gov Loan Specialist Lupe Zamora Ext 245 lupe.zamora@sba.gov Loan Servicing Assistant Leann Lopez Ext 224 leann.lopez@sba.gov Loan Servicing Assistant Janet Shelley Ext 207 janet.shelley@sba.gov Loan Servicing Assistant Ray Ornelas Ext 251 raymond.ornelas@sba.gov Loan Servicing Assistant Theresa Pike Ext 243 Theresa.pike@sba.gov Loan Servicing Assistant Julia Young Ext 216 Julia.young@sba.gov Loan Servicing Assistant Robert Krum Ext 213 Robert.krum@sba.gov Loan Servicing Assistant Laura Crombie Ext 241 laura.crombie@sba.gov mailto:fsc.servicing@sba.gov mailto:fsc.purchasing@sba.gov mailto:scott.fitzbiggon@sba.gov mailto:elisa.mendoz@sba.gov mailto:leslie.niswander@sba.gov mailto:scott.fitzbiggon@sba.gov mailto:michelle.serrano@sba.gov mailto:Daniel.urdesich@sba.gov mailto:elodia.castro@sba.gov mailto:Olivia.fraijo@sba.gov mailto:tim.sabbatini@sba.gov mailto:lupe.zamora@sba.gov mailto:leann.lopez@sba.gov mailto:janet.shelley@sba.gov mailto:raymond.ornelas@sba.gov mailto:Theresa.pike@sba.gov mailto:Julia.young@sba.gov mailto:Robert.krum@sba.gov mailto:laura.crombie@sba.gov

Table 1-2: Fresno Commercial Servicing Center 503/504 Team (continued)

SBA 504 Liquidation Ast Ctr Dir and Supv Loan Specialist

Leslie Niswander Ext 225 leslie.niswander@sba.gov

Loan Specialist Barbara Jung- Jung

Ext 253 barbara.jung@sba.gov

Loan Specialist Xong Vang Ext 229 xong.vang@sba.gov Loan Specialist Mary Jane

Oehlschlager Ext 228 maryjane.oehlschlager@sba.gov

Loan Servicing Assistant Salvador Del Campo

Ext 222 Salvador.delcamp@sba.gov

Loan Servicing Assistant David Gonzalez Ext 258 david.gonzalez@sba.gov Loan Servicing Assistant Janice Monson Ext 248 Janice.monson@sba.gov SBA Express Purchases Ast Ctr Dir and Supv Loan Specialist

Gary Wamhof Ext 227 gary.wamhof@sba.gov

Loan Specialist Joseph King Ext 271 joseph.king@sba.gov Loan Specialist Greg Brooks Ext 254 greg.brooks@sba.gov Loan Servicing Assistant Abhishek

Shamarao Ext 217 abhishek.shamarao@sba.gov

Loan Servicing Assistant Helen McEwin Ext. 233 Helen.mcewin@sba.gov Loan Servicing Assistant Leann Lopez Ext. 224 leann.lopez@sba.gov Loan Servicing Assistant Joanne Funkner Ext 206 joanne.funkner@sba.gov Loan Servicing Assistant Minerva

Gonzalez Ext 235 Minerva.gonzalez@sba.gov

Loan Servicing Assistant Lois Fontes Ext 249 lois.fontes@sba.gov Loan Servicing Assistant Kim Brady Ext 238 kim.brady@sba.gov Loan Servicing Assistant Kenneth Pilling Ext 240 Kenneth.pilling@sba.gov Loan Servicing Assistant Jennifer Foraker Ext 239 Jennifer.foraker@sba.gov mailto:leslie.niswander@sba.gov mailto:barbara.jung@sba.gov mailto:xong.vang@sba.gov mailto:maryjane.oehlschlager@sba.gov mailto:Salvador.delcamp@sba.gov mailto:david.gonzalez@sba.gov mailto:Janice.monson@sba.gov mailto:gary.wamhof@sba.gov mailto:joseph.king@sba.gov mailto:greg.brooks@sba.gov mailto:abhishek.shamarao@sba.gov mailto:Helen.mcewin@sba.gov mailto:leann.lopez@sba.gov mailto:joanne.funkner@sba.gov mailto:Minerva.gonzalez@sba.gov mailto:lois.fontes@sba.gov mailto:kim.brady@sba.gov mailto:Kenneth.pilling@sba.gov mailto:Jennifer.foraker@sba.gov

Contacting Colson and DCFC____________________________

Mailing Delivery & Street Mail Colson Services Corp. P.O. Box 1289 504 Loan Department Bowling Green Station 101 Barclay Street New York, NY 10274 8th Floor East New York, NY 10286

Toll Free Telephone: 1-800-225-4285

Rich Ventura: 212-815-4749

Fax I: 212-313-0148 Fax II: 212-313-0163

Colson web site: www.colsonservices.com

Colson email address:

504department@colsonservices.com

Mailing & Delivery Development Company 6764 Old McLean Village Drive Funding Corporation McLean, VA 22101 (DCFC) Telephone: 703-748-2580 Fax number: 703-748-2582

DCFC Fiscal Agent Steve Van Order: 401-418-8204 Fax: 401-418-8201 Email address: vois@comcast.net

DCFC President Chris Crawford: 703-748-2580 Fax: 703-748-2582 Email address: chris@nadco.org

DCFC Director of Technical Issues Linda Reilly: 703-748-2575 Fax: 703-748-2582 Email address: linda@nadco.org http://www.colsonservices.com/ mailto:vois@comcast.net mailto:chris@nadco.org mailto:linda@nadco.org

Contacting SBA Loan Servicing Centers__________________

Fresno Commercial U.S. Small Business Administration Loan Servicing Center Commercial Loan Servicing Center 2719 North Air Fresno Drive Suite 107 Fresno, CA 93727-1547

Telephone: 559-487-5650

Fax number: 559-487-5803

Service Center Director

Joel Stiner: 559-487-5136 Ext. 215 Fax: 202-481-2575 Email address: joel.stiner@sba.gov

Little Rock Commercial U.S. Small Business Administration Loan Servicing Center Commercial Loan Servicing Center 2120 Riverfront Drive Suite 100 Little Rock, AR 72202

Telephone: 501-324-5871

Fax number: 501-324-6072

Service Center

Director Nique Carrington: 501-324-5871 Ext. 267

Fax: 202-481-4433 Email address: nique.carrington@sba.gov mailto:joel.stiner@sba.gov

Contacting SBA Central Office__________________________

SBA Central Office Office of Financial Assistance

U.S. Small Business Administration 409 3rd Street S. W. Suite 8300 Washington, DC 20416

Director, Loan Programs Div., OFA James Hammersley: 202-205-7505 Fax number: 202-481-2381 Email address: james.hammersley@sba.gov

Chief, 504 Program Branch, Loan Programs Div., OFA Andrew “Bin” McConnell: 202-205-7238 Fax number: 202-481-0219 Email address: andrew.mcconnell@sba.gov

Your SBA District Office

Telephone: ______________________

Fax number: ______________________

Telephone: ______________________

Fax number: ______________________ mailto:james.hammersley@sba.gov mailto:andrew.mcconnell@sba.gov

Wiring instructions_____________________________________ Instructions for wiring payments

These wiring instructions are used any time a borrower wires payments, including prepayments. The account number is different for 504 loans then for 503 loans.

Please Note: The borrower must fill in its 10-digit SBA Loan Number for the wire transaction to be credited to the right account. Either the borrower’s name or the operating company name (or both) must be part of the information.

504 Loans

The Bank of New York, New York 101 Barclay Street, 8th Floor East New York, NY 10286

ABA Routing Number: 021 000 018

Account Number, 504 Loans: 8900606762

10-digit SBA Loan Identification Number: □ □ □ □ □ □ □ □ □ □

Name of Borrower/Operating Company: ________________________________

For credit to Colson Services Corp.

503 Loans

The Bank of New York, New York 101 Barclay Street; 8th Floor East New York, NY 10286

ABA Routing Number: 021 000 018

Account Number, 503 Loans: 8900606770

10-digit SBA Loan Identification Number: □ □ □ □ □ □ □ □ □ □

Name of Borrower/Operating Company: _________________________________

For credit to Colson Services Corp.

Chapter 2

Closing the 504 Loan

Closing responsibilities 15 Overview of the closing process 16 Closing documents the CDC sends to COLSON 17 Role of the SBA District Office Legal Counsel 20 Closing documents the CDC sends to CLSC 21 Deadlines for sending documents for funding 22

Closing responsibilities__________________________________

Certified Development Company

• Track progress of the 504 project.

• Close as soon after project completion as possible.

• Follow procedures to make any final changes to the Authorization for

Debenture Guarantee (SBA 504 Loan). Any amendments must be submitted to the Sacramento Loan Processing Center (SLPC) and approved prior to submitting the Closing Package to SBA District Counsel.

• Schedule closing to meet funding deadlines.

• Close 504 Loan in accordance with requirements of the Authorization for

Debenture Guarantee and 504 Loan Program Requirements.

• See that all closing documentation is complete and accurate.

• Forward the Closing Package to the SBA District Counsel.

• Forward certain documents directly to COLSON to meet the scheduled funding date deadlines.

SBA District Counsel

• Review Closing Package.

• Final check for accurate completion of documents to be forwarded by CDC to

COLSON for funding.

• Final check for complete and correct signatures on documents to be forwarded by CDC to COLSON for funding.

• SBA District Counsel sends an e-mail to Colson and CDC approving the

Closing Package and authorizing the funding of the 504 Loan for the upcoming debenture sale; the CDC then sends the applicable documents to COLSON via overnight courier or mail with tracking capability prior to the cutoff deadline.

Overview of the closing process___________________________ Fundamental steps

Step 1 The CDC closes the 504 Loan in time to meet a specific debenture funding date. At the time of closing, the project must be complete (except funds put into a construction escrow account to complete a minor portion of the project as specified in SOP 50-10(5)), and any final changes to the Authorization for Debenture Guarantee must be approved by SLPC. CDCs should note that SOP 50-10(5) is being revised every 6 months and should be reviewed as needed. Changes in references resulting from SOP revisions will be reflected in the next edition of the CSA manual.

The timing process to meet the debenture funding date begins here.

Step 2 The CDC sends its Closing Package to SBA District Counsel. All documentation to satisfy the requirements of the Authorization must be in place.

Each SBA District Counsel sets deadlines for submission of Regular and

Expedited Closing Packages. If your SBA District Counsel has not set a deadline, then the deadline for submission to SBA District Counsel is 29 days before debenture funding.

Step 3 The SBA District Counsel reviews the Closing Package and notifies COLSON and CDC via e-mail that the 504 Loan is approved for debenture funding.

Step 4 The CDC then forwards certain documents needed for the debenture funding directly to COLSON using a transmittal letter or spreadsheet.

The documents are:

(1) the ACH Debit Form with the original voided check

(2) the IRS W-9 Form

(3) the Third Party Lender participation fee (unless deducted from the

CDC’s processing fee)

(4) the original Debenture

(5) the original Servicing Agent Agreement

(6) a copy of the Note

(7) a copy of the e-mail from SBA District Counsel approving the Closing

Package.

These documents must be sent to COLSON when the Closing Package has been approved by your SBA District Counsel.

Documents from the CDC are due at COLSON 22 calendar days before debenture funding. SBA publishes the cutoff dates in a yearly calendar.

Step 5 After debenture funding, the CDC completes the Note, Servicing Agent Agreement and Debenture, and sends those with the other closing documents to the applicable SBA Commercial Loan Servicing Center (CLSC).

Closing documents the CDC sends to COLSON_____________

Documents the CDC sends directly to COLSON

1. Forms to set up an automatic debit for the borrower’s monthly 504 Loan payment.

ACH Debit Form

• From the account for the monthly 504 payment withdrawal

• Information must be accurate and complete

• Must be signed by an individual authorized to sign on the account

Voided check

• Information on the check must match the ACH Debit form

• A photocopy of a voided check is acceptable

• A deposit slip is NOT acceptable

2. The Third Party Lender’s participation fee is required if any portion of the Third

Party Loan is secured in a senior lien position to SBA.

• Check made payable to “COLSON” or “SBA”

• Borrower name

• SBA Loan Number

• Funding date

• Third Party Loan amount

• Amount of fee enclosed

• Method of fee payment

See Chapter 3 pages 25 and 26 for a sample transmittal letter and transmittal form.

Closing documents the CDC sends to COLSON_____________ Documents the CDC sends directly to COLSON

3. IRS Form W-9

• The borrower’s legal advisor or accountant should advise the borrower on how to complete this form – NOT the CDC

• Must be complete

• Must be accurate

• Only one IRS Form W-9 per loan

• The CDC’s name and address should be listed in the Box for Requester’s

Name and Address

• The 504 Loan number should be listed in the Box for List account number(s) here

4. Original of Servicing Agent Agreement (SBA Form 1506)

5. Copy of Note (SBA Form 1505)

6. Original Debenture (SBA Form 1504)

• The CDC must forward the documents needed for funding to COLSON via overnight delivery. This funding package must be received ten (10) business days prior to pricing. Send to:

COLSON Services Corp.

504 Loan Department 101 Barclay Street, 8th Floor East

800-225-4285

• Process for sending documents to COLSON:

STEP 1: An e-mail from SBA District Counsel authorizing inclusion of the 504 Loan in the sale.

STEP 2: The CDC and/or its CDC closing attorney sends the following hard copy documents (not electronic submissions or PDFs) to COLSON with the transmittal letter:

1. Copy of the 504 Note. The original is retained by the CDC and, after debenture funding, is sent by the CDC to the CLSC to be kept in SBA’s collateral file.

2. Original Servicing Agent Agreement.

3. Original Development Company 504 Debenture.

4. The original IRS Form W-9;

5. The original ACH Debit Authorization Form; and

6. The Third Party Lender Participation Fee unless deducted from the CDC’s processing fee.

Role of the SBA District Counsel_______________

Review documentation for legal sufficiency

The Office of General Counsel (OGC) instituted streamlined procedures for closing 504 Loans effective August 1, 2007.

• For Priority CDCs using Designated Attorneys, SBA District Counsel reviews an

Expedited Closing Package consisting of the first 12 items on the 504 Debenture Closing Checklist (SBA Form 2286)

• For non-Priority CDCs or Priority CDCs not using a Designated Attorney, SBA

District Counsel reviews a Regular Closing Package consisting of up to the 25 items on the 504 Debenture Closing Checklist (SBA Form 2286)

• District Counsel writes an opinion that the 504 Loan has been closed in accordance with the 504 Loan Program Requirements

• District Counsel sends an e-mail to COLSON with a copy to the CDC approving the

Closing Package and authorizing the funding of the 504 Loan for the upcoming debenture sale

Procedures for submission of Closing Packages to SBA District Counsel and submission of documents to COLSON.

• Submission of Closing Package. The CDC completes the 504 Debenture Closing

Checklist (SBA Form 2286) and submits a Closing Package of documents in the order listed on the Checklist to SBA District Counsel.

• Submission of documents to COLSON. The CDC holds all original documents until

SBA District Counsel notifies COLSON and the CDC that the Closing Package is approved and the 504 Loan is authorized for debenture funding. The CDC then sends the following documents to COLSON:

• the ACH Debit Form with the original voided check

• the IRS W-9 Form

• the Third Party Lender participation fee (unless deducted from the CDC’s processing fee)

• the original Debenture

• the original Servicing Agent Agreement

• a copy of the Note

• a copy of the e-mail from SBA District Counsel approving the Closing

Package

Closing documents the CDC sends to CLSC _____________ Documents the CDC sends directly to CLSC

• Collateral and closing document transfer. Within 30 days after Debenture funding, the CDC transfers all original documents listed on the 504 Debenture Closing Checklist (SBA Form 2286) to the applicable SBA Commercial Loan Servicing Center (“CLSC”), using the 504 Debenture Closing Checklist as the collateral listing. If any original documents are not yet in the CDC’s possession (e.g., a mortgage or deed of trust has not been returned yet from the recording office), then once all remaining documents have been received, the CDC sends one follow-up package to the CLSC with the trailing documents.

• CDC completes the Note, Servicing Agent Agreement and Debenture. The CDC needs to complete three of the closing documents as follows:

• Note. The CDC downloads the completed, conformed page 1 of the Note (SBA Form 1505) from the COLSON website and inserts it into the Note.

The CDC also downloads the Note amortization schedule from the COLSON website and attaches it to the original Note. The CDC then sends copies of the completed Note and amortization schedule to the Borrower.

• Servicing Agent Agreement. The CDC downloads the completed, conformed pages 3 and 4 of the Servicing Agent Agreement (SBA Form 1506) from the COLSON website and inserts those in the copy of the Servicing Agent Agreement. The CDC sends a copy of the completed Servicing Agent Agreement to the Borrower.

• Debenture. The Trustee sends the CDC the conformed page 1 of the

Debenture (SBA Form 1504) which the CDC inserts into the copy of the Debenture, and the Debenture amortization and prepayment schedule(s).

Deadlines for sending documents for funding_______________

Table 2-1: Deadlines for Sending Documents for Funding

Sandy recommends that we separate this into 2 sections, starting with “Copy of the 504 Note” should be listed under CDC.

WHO WHAT DOCUMENTS WHEN TO SEND

Certified - Original ACH Debit Authorization Submit to COLSON Development Form with voided check after SBA District Company - Original Third Party Lender approved the Closing participation fee (if applicable) Package and no later than

- Original IRS Form W-9 22 days before debenture

- Copy of the 504 Note funding

- Original Servicing Agent Agreement

- Original Debenture

- Transmittal letter to COLSON

- Closing Package Submit to SBA District

Counsel before the published cutoff date or no later than 29 days before debenture funding

SBA District - SBA District Counsel e-mails After review for legal Counsel approval of Closing Package sufficiency

Chapter 3

Preparing Closing Documents

General information 23 ACH debit form 27 Automatic Notification of ACH rejections 28 Precautions for Working with Borrowers on ACH debits 29 504 Note 33 Development Company 504 Debenture 45 Servicing Agent Agreement 56 IRS Form W-9 76

General information about preparing closing documents_____

This chapter covers how to prepare the closing documents necessary for the debenture funding that are reviewed or used by COLSON.

General reminders about completing closing documents

As the volume of 504 Loans has increased, so too have the errors that are being made on closing documents. It is the CDC’s responsibility to see that documents completed to close the 504 Loan are both accurate and complete.

Be available if COLSON calls about an error on a document. Respond immediately.

Follow COLSON’s instructions to correct the error and get the document to COLSON within the deadline.

Check these before you begin:

1. Did you request an increase in the 504 Loan amount since the Authorization was issued?

If yes, check with SBA to see if the increase was entered in SBA’s “PMQD” system.

2. Are fee calculations correct?

Remember certain fees change every year.

• Do you have the correct fees for the fiscal year in which the 504 Loan was originally approved?

• Perform a check to see if all fees are included and that the fees are correct.

3. Will COLSON deduct the Third Party Lender Participation Fee from your processing fee?

If yes, will your CDC processing fee cover the full amount of the Third Party Lender Participation Fee that needs to be paid?

COLSON asks that all CDCs use the transmittal letter on the next page and transmittal spreadsheet on the page after the sample transmittal letter for submitting documents to COLSON. The letter may be on the letterhead of the CDC or CDC closing attorney.

ON CDC OR CLOSING ATTORNEY LETTERHEAD

DATE

Colson Services Corporation Attn: Rich Ventura 504 Loan Department 101 Barclay Street 8th Floor East

Re: SBA Loan Number:

SBA Loan Name:

CDC Name:

Dear Mr. Ventura:

We enclose the following items (check all that are applicable):

[Required] Copy of SBA District Counsel’s e-mail approval of closing for funding [Required] Original executed Servicing Agent Agreement _ [Required] Copy of executed Note (CDC/504 Loan) [Required] Original executed Debenture [Required] Original executed ACH Authorization Agreement with voided check [Required] Original executed IRS Form W-9 ___ [Optional] Check for Third Party Lender participation fee or ___ Withhold Third Party Lender participation fee from CDC Processing Fee

[Required if there is a Third Party Lender participation fee] The Third Party Lender participation fee is in the amount of $________ based on Third Party Loan amount of $__________ secured in a senior lien position on Project collateral

It is contemplated that the debenture sale for this Loan will take place on FUNDING

DATE.

The CDC contact information is as follows:

Name of CDC Contact: ____________________________________________ E-mail Address: _____________________________________________ Telephone: _____________________________________________ Fax: _____________________________________________

Sincerely, Sample Transmittal Spreadsheet

LOANS BEING SUBMITTED BY ________________________________ (CDC)

FOR _____________________, 20____ DEBENTURE SALE

Date: _______________________, 20_____

[Required] Loan No.

[Required] Loan Name

[Required] E-mail of

SBA

District Counsel approval

[Required] Original Ser-vicing Agent Agreement

[Required] Copy of Note

[Required] Original Debenture

[Required] Original ACH debit form w/ voided check

[Required] Original IRS Form W-9

[Optional] Check for Third Party Lender fee *

The CDC contact information is as follows: SEND TO:

Name of CDC Contact:_____________________________________________ Colson Services Corporation E-mail Address: _____________________________________________ Attn: Rich Ventura Telephone: _____________________________________________ 504 Loan Department Fax: _____________________________________________ 101 Barclay Street, 8th Floor East

*If the check for the Third Party Lender Fee participation fee is not included, that fee (based upon the full amount of the Third Party Loan) will be withheld from the CDC’s Processing Fee unless CDC advises otherwise in writing.

ACH debit form________________________________________

What you should know about this COLSON form

This form is required in order for COLSON to debit the monthly payment for 504 Loans.

The form authorizes an automatic debit from the specific account listed on the form.

COLSON checks the account information on the attached voided check against the information typed on the form. If the account is NOT a checking account, please verify if the account can be debited.

Who prepares this form?

The CDC is responsible for seeing that this form is completed correctly. It may be completed by the CDC or the CDC Counsel.

Is it necessary to send COLSON the originals?

Yes. The original form with the depositor’s signatures must be sent to COLSON. Either the original voided check or a photocopy of the check must accompany the ACH debit form. You also may fax the ACH form as long as you follow up the fax by sending the form with the original signature to COLSON.

Who sends this form to COLSON?

The CDC or CDC Counsel should send the form and voided check directly to COLSON.

When are the ACH debit form and voided check due at COLSON?

The form should be sent to COLSON as part of the documents that the CDC submits to COLSON after the SBA District Counsel sends his/her e-mail to COLSON and the CDC approving the Closing Package and authorizing the 504 Loan to be funded.

Who debits the money from the borrower’s bank account?

Since COLSON is not a financial institution, it cannot directly debit a borrower’s bank account. COLSON’s banking facility, The Bank of New York, does the debit. The debit may show different listings on the borrower’s bank statement. What is listed is determined by the borrower’s bank of account. The borrower’s bank statement will be debited as “504 Loan” or “SBA” and will show “Colson Services Corp.” or “The Bank of New York.”

What you should know about this COLSON form (continued)

Is it acceptable to use another form of ACH debit?

Yes. COLSON will accept a bank ACH debit form as long as it authorizes COLSON Services Corp. to debit the account.

Is the ACH debit form filled out differently if the bank ACH debit form is used?

Yes.

1. You MUST type, “COLSON SERVICES CORP.” onto the first line if you use any form other than the ACH debit form provided by COLSON.

2. Do NOT type SBA’s name on the first line of a bank ACH debit form.

3. Do NOT type your CDC’s name on the first line of a bank ACH debit form.

NO SBA or Small Business Administration

NO Your CDC’s Name

YES COLSON SERVICES CORP.

BORROWER ACH PRE-NOTE NOTIFICATION:

When a new SBA 504 monthly loan payment is established by COLSON for ACH bank debit, the borrower’s designated bank account is pre-noted by COLSON via The Bank of New York. The pre-note is a $0.00 test to alert the borrowers' bank that COLSON will initiate the ACH Debits for the monthly loan payments on the first business day of each month via The Bank of New York. No action is required by the borrower or CDC other than to recognize that COLSON will use The Bank of New York to initiate the ACH Debits beginning on the first day of the month following the pre-note test and debenture funding and each month thereafter.

Automatic Notification of ACH Rejection

COLSON has updated their loan portfolio management system to send an automatic rejection notices to CDCs in the event that a Borrower’s ACH is rejected. The system will send an auto-generated e-mail to each CDC (minimum two e-mails addressed by CDC) each time a Borrower ACH payment rejects. COLSON will post the Borrower ACH payment reject data the next business day on the CDC Online website. COLSON maintains a 2-3 month history of ACH reject data on the CDC Online website before overwriting with more recent ACH reject data. CDCs will receive an update from NADCO when the automatic notification of ACH rejection becomes effective.

Precautions for Working with Borrowers on ACH:

See if your Borrower’s Third Party Lender (and/or bank of account) has fraud protection in place on the account designated for the ACH debits. Fraud protection means that no party can debit the account without expressed permission. Sometimes Borrowers forget they have fraud protection in place and they don’t tell the CDC until after their first ACH debit is rejected. If the Borrower has fraud protection in place on the designated ACH debit account, then prior to closing the Borrower can remedy this in two ways that will allow the ACH draft. The Borrower can ask their Third Party Lender/bank of account to make an exception for the 504 ACH Draft from COLSON and provide identifying information to enable COLSON and only COLSON to access the account. However, some bank debit software is not sophisticated and those lenders only have the option of allowing entry by debit into the account or not allowing access to the account. If that is the case for your Borrower’s Third Party Lender/bank of account, there is a second option. The Borrower can set up a separate account and have the bank transfer only the amount of the ACH monthly draft into that account. That way, the ACH debit can occur, and the Borrower can feel that its other funds are secure with the Third Party Lender/bank of account’s fraud protection.

AUTHORIZATION AGREEMENT FOR PREAUTHORIZATION PAYMENT (DEBIT)

I (we) authorize COLSON SERVICES CORP. (Company) to initiate debit entries payable to the account (described below) and bank (named below) to debit the amounts of such entries to the amount:

Periodically as such amounts become due, without further authorization (standing authorization).

or

Only on receipt of a further authorization signed by me (or either of us) authorizing a single entry in a specific amount (one-time authorization).

(1) Bank Name

Address

City State Zip (2) Account: Checking Savings Other:

(3) Transit ABA (4) (5) Transit Routing Number Check Digit Account Number Information

Designated by Federal Reserve

NOTICE: When completing account number information, insert a hyphen (-) for each Dash Cue Symbol (-) contained in the field, and insert a number sign (#) for each “On Us” Cue Symbol (|’).

This form must be received by Colson Services Corp. prior to the 15th of the month for ACH changes/new accounts to be effective on the 1st of the subsequent month.

(6)

Depositor(s) Name(s)

Signature Date

Signature 2 (As Required)

-Attached Voided Check Here- (7)

FOR CDC USE ONLY:

CDC Number:

SBA Loan Number:

Borrower’s Name:

Statement Name: ___________________

Instructions for ACH debit form

Table 3-1: ACH Debit Form Instructions

Number

Information Requested

Authorization Agreement for Preauthorized Payments (Debits) Form Instructions

(1) Bank information

Enter information about the bank where the account is held:

• Bank Name

• Branch Name

Enter branch location:

• Street Address

• City, State, Zip Code

(2) Type of Account • “X” the type of account checking ٱ savings ٱ other ٱ

• If “other” is checked, write in the type of account

• Contact the bank to verify account can be debited.

(3) Transit Routing Number

At the bottom of the check, there is a set of numbers.

Starting from the left, enter the first 8 digits of the numbers between these symbols |: |:

(4) Check Digit Enter the 9th digit of the Transit Routing Number from the bottom of the check

(5) Account Number

Enter the account number.

If there is a Dash Cue Symbol ( - ) insert a hyphen -

If there is an “on us” symbol ( |’ ), insert a number sign #

(6) Depositor Information

• Print or type the account title on the account.

• Enter the date the ACH form was signed.

• The ACH form must be signed by an individual or individuals authorized to sign on behalf of the account.

(7) For CDC Use Only This MUST be filled in

• Enter your CDC Number.

• Enter the 10-digit SBA Loan Number for this loan.

• Enter the Borrower’s Name as it appears on the Authorization.

• Enter the Statement Name (the statement name that the CDC has designated on Page 1 or the Servicing Agent Agreement).

REMINDER:

Attach the voided check or a copy of the check from the account that will be debited.

Final check for accuracy

Is this form complete?

Is this form accurate?

• Is the bank name correct?

• Is the name of the branch entered?

• Is the branch address correct?

• If savings or “Other” was checked in blank (2) did you verify with the bank that this account can be debited?

• Does the Transit Routing Number and check digit in blank (3) and

(4) match the 9 digits of the Transit Routing Number on the voided check?

• Does the Account Number Information in blank (5) match the

Account Number on the voided check?

• Is the account title on the ACH debit form inserted in blank (6)?

• Has the depositor (s) signed and dated the ACH debit form?

• Have you completed the four lines in blank (7) that ask for the CDC Name, the 10-digit SBA Loan Number, the Borrower’s Name and the Statement Name?

• Is the voided check or a photocopy attached?

504 Note______________________________________________ What you should know about SBA Form 1505

The 504 Note is that document that a Borrower signs that obligates the Borrower to repay the 504 Loan. The CDC serves in the capacity of lender of 504 monies to the Borrower.

When closing 504 Loans, CDCs are required to use certain mandatory SBA forms, including the Note (CDC/504 Loans) (SBA Form 1505 (10/98)). Computer reproductions and photocopies are permitted so long as the form is an exact copy of SBA Form 1505.

It is the practice in some states and under certain circumstances for CDCs to have the Note and various other 504 Loan documents signed at the outset of the Project. This typically occurs only when construction or significant renovations are part of the Project.

For example, in a construction Project, the Note and mortgage or deed of trust are signed simultaneously with the Interim Lender’s documents, and the mortgage or deed of trust is then recorded before construction begins in order to avoid issues with mechanics’, material men’s or contractors’ liens.

Not infrequently, as construction progresses the Project Costs and 504 Loan amount are increased or decreased through 327 action modifications to the Authorization for Debenture Guarantee. The practice, in such situations, is for the CDC to have the Borrower and Guarantors sign a modification agreement that modifies the Note and any other already-executed 504 Loan documents to conform to the Authorization as amended.

When doing so, the CDC also must have the Borrower execute a restated Note that conforms to the Authorization as amended, and, as appropriate, modifications to the other 504 Loan documents. In the Closing Package to SBA District Counsel, the CDC must include copies of the original Note, the restated Note and the modification agreement. If the CDC (as a non-Priority CDC or a Priority CDC not using Designated Counsel) is submitting a Regular Closing Package, the CDC also must include copies of the other 504 Loan documents as modified and/or restated in accordance with the 504 Debenture Closing Checklist (SBA Form 2286).

Once the Closing Package is approved by SBA District Counsel, the CDC must send only a copy of the restated Note that conforms to the Authorization as amended to COLSON. Because COLSON reviews hundreds of 504 closings for each month’s debenture sale, the process from COLSON’s perspective must be seamless: COLSON will only review the final Note (SBA Form 1505), and not attached modification agreements or other documentation.

Effective as of October 14, 2008, COLSON will reject any 504 Loan closing that is submitted with a Note amended by a modification agreement or other documentation.

COLSON will accept only 504 Loan closings with restated Notes conforming to the Authorization as amended.

Because the Note is a mandatory form, these guidelines must be followed:

1. The text of the Note may not be altered.

2. No additions may be made to the Note except to insert information required to complete the form.

3. The form must be filled out where indicated, including any state-specific language required by state law that appears in your Authorization.

4. The Note must be completed accurately and in accordance with the Authorization, as amended.

5. The CDC must not insert choice-of-law provisions into the Note. If the CDC includes choice-of-law language in another closing document, e.g., in the CDC’s Loan Agreement if the CDC uses such a document, then the CDC must state that federal law applies when SBA is the holder of the Note.

6. The grid on the first page:

a. All spaces in the grid must be completed. Most information will come from the

Authorization as amended. The information in the grid must be consistent in all closing documents.

b. If there is more than one borrower or Operating Company, enter all the borrowers and Operating Companies as listed in the Authorization.

c. If the Operating Company is a Co-Borrower, then its name should appear in the boxes for Borrower and for Operating Company.

7. The CDC creates the signature block at the end of the Note. The signature block must include the legal name of the individual or entity signing the Note and, where applicable, the name and title of the authorized person(s) who execute the Note.

8. The CDC downloads the completed, conformed page 1 of the Note from the COLSON website after debenture funding. The CDC sends a copy of the conformed, completed Note to the Borrower.

U.S. Small Business Administration U.S. Small Business Administration

(SBA Logo) NOTE

(CDC/504 LOANS)

SBA Loan #

SBA Loan Name

(2)

(3)

Loan Amount

(4)

(5)

Operating Company

(6)

CDC

(7)

Funding Date: ___________(8)__________________ * Interest Rate: _______(11)_____________________ %

First Payment Due: ___________(9)______________ * P&I Amount: $ ___________(12)_________________

Note Maturity Date: _______________(10)________ * Monthly Payment: $ _____________(13)__________

(* blank at signing)

1. PROMISE TO PAY:

In return for the Loan, Borrower promises to pay to the order of CDC the amount of

____________________________________(14)_________________________________________ Dollars, interest in the unpaid principal balance, the fees specified in the Servicing Agent Agreement, and all other amounts required by this note.

2. DEFINITIONS:

“Collateral” means any property taken as security for payment of this Note or any guarantee of this Note.

“Debenture” means the debenture issued by CDC to fund the Loan.

“Guarantor” means each person or entity that signs a guarantee of payment of this Note.

“Loan” means the loan evidenced by this Note.

“Loan Documents” mean the documents related to this loan signed by Borrower, Guarantor, or anyone who pledges collateral.

“SBA” means Small Business Administration, an Agency of the United States of America.

“Servicing Agent Agreement” means the agreement between the Borrower and the CDC that, among other things, appoints a servicing agent (“Servicing Agent”) for this Note.

SBA Form 1505 (10/98) Previous editions obsolete Page 1/5

Instructions for Preparing 504 Note

Table 3-2: 504 Note Instructions

Requested

SBA 504 Note Form Instructions

(1) SBA Loan Number

This is on the first page of the Authorization for Debenture Guarantee.

It is a 10-digit number.

If this is a CAIP, or PCLP loan, “CDC” will be preceded by:

CAI or CAIP or PCL or PCLP

(2) SBA Loan Name

This is on the first page of the Authorization.

(3) Date

This is the date that the 504 Note is signed

Reminder: The dates on the Note, Debenture and the Servicing Agent Agreement should match. If not, then the date of the Note must precede the date of the Servicing Agent Agreement.

(4) Loan Amount

This is on the first page of the Authorization for Debenture Guarantee.

It must be in even thousands

YES $ 203,000.00

NO $ 202,563.00

Reminder: Did you amend the Authorization? If so, did the amount change? If it did, then insert the amended amount on the Note.

(5) Borrower

Enter the names of all borrowers as they appear on the first page of the Authorization.

Do not include “dba” names.

Co-Borrower: Insert the name(s) of any Co-Borrowers in the Borrower box

Reminder: Did you amend the Authorization? If so, did the Borrower’s name(s) change? If it did, then insert the amended name on the Note.

(6) Operating

EPC Loan: Enter the name of the Operating Company as it appears on the first page of the Authorization, if there is an EPC.

Do not include “dba”…