Written by SBA Form 3506: A Comprehensive Guide to the Lender Agreement
SBA Form 3506 is an important document that lenders need to be aware of when processing SBA loans. This form is the Lender Agreement that outlines the responsibilities of both the lender and the Small Business Administration (SBA) when it comes to loan processing, servicing, and liquidation. In this article, we’ll take a closer look at the SBA Form 3506 and what it entails.
What is the SBA Form 3506?
The SBA Form 3506 is a document that sets forth the terms and conditions under which a lender may participate in the SBA’s loan programs. It outlines the responsibilities of both the lender and the SBA, such as loan processing, servicing, and liquidation. It is a key document that every lender must sign if they want to participate in the SBA’s loan programs.
Why is the SBA Form 3506 important?
The SBA Form 3506 is a crucial document as it outlines the legal terms and conditions that govern the relationship between the lender and the SBA. It is vital for lenders to understand their responsibilities when it comes to loan processing, servicing, and liquidation. By signing this agreement, lenders commit to following the SBA’s loan program requirements, ensuring fair and equitable treatment of borrowers, and complying with all applicable laws and regulations.
What are the key provisions of the SBA Form 3506?
The SBA Form 3506 consists of several provisions that lenders should be familiar with. Here are some of the key provisions of the agreement:
1. Loan Processing: The agreement outlines the lender’s obligation to process SBA loans in accordance with SBA requirements and procedures.
2. Loan Servicing: The lender is responsible for servicing the SBA loans in accordance with SBA requirements and procedures.
3. Liquidation: The SBA has the right to liquidate the loan if the lender fails to comply with the terms and conditions of the agreement.
4. Fees and Compensation: The lender is entitled to fees and compensation for loan origination, processing, and servicing, subject to SBA requirements.
5. Reports and Records: The lender is required to maintain accurate records and submit reports to the SBA as required.
6. Compliance with Laws and Regulations: The lender must comply with all applicable laws and regulations relating to SBA loans.
Conclusion
The SBA Form 3506 is a critical document that outlines the terms and conditions governing the relationship between the lender and the SBA. By signing this agreement, lenders commit to following all the SBA’s loan program requirements, ensuring fair and equitable treatment of borrowers, and complying with all applicable laws and regulations. As a lender, it’s important to understand your obligations under this agreement and ensure compliance with all SBA requirements.