If you`re a small business owner in need of financial assistance, you may come across the SBA Form 2287 Third Party Lender Agreement. This document serves as an agreement between the Small Business Administration (SBA), a third-party lender, and the borrower. In this article, we will break down what this form entails and why it`s important.
Firstly, let`s discuss what the SBA is. The SBA is a federal agency that provides support to small businesses in the form of loans, contracts, and counseling. The agency works with approved lenders to provide loans to small businesses. However, these loans are not given directly by the agency but rather through third-party lenders.
This is where the SBA Form 2287 comes in. When a third-party lender wants to provide a small business loan backed by the SBA, they must sign a Third Party Lender Agreement. This agreement outlines the terms and conditions that the lender must adhere to when providing the loan.
The agreement covers various points such as interest rates, collateral requirements, loan disbursement schedules, and the responsibilities of both the lender and the borrower. To break it down further, let`s go over some of the key points of the SBA Form 2287:
Interest Rates: The interest rate on an SBA-backed loan is typically lower than what a borrower would receive from a traditional lender. The agreement outlines the maximum interest rate the lender can charge and how it`s calculated.
Collateral Requirements: The SBA Form 2287 specifies the collateral required for the loan. The lender must provide details on the assets that will be used as collateral for the loan.
Loan Disbursement Schedule: The Third Party Lender Agreement also outlines the schedule for disbursing the loan. The lender must adhere to this schedule when issuing the loan to the borrower.
Responsibilities of the Lender and the Borrower: The agreement lays out the responsibilities of both the lender and the borrower. This includes the lender`s obligation to disburse the loan, and the borrower`s obligation to make timely loan payments.
In conclusion, SBA Form 2287 Third Party Lender Agreement is a crucial document for small business owners seeking financial assistance through the SBA. It ensures that the lender complies with the SBA`s rules and regulations and provides the borrower with clear terms and conditions for the loan. Before signing the agreement, it`s essential for the borrower to review the document carefully and seek advice from a professional advisor to fully understand the terms and conditions.