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SBA Moves to Seize EDF Resource Capital, Second Largest 504 Lender

SBA has posted on it’s website an 82-page order permanently revoking Resource Capital’s authority to participate in all aspects of SBA’s 504 Loan Program, including all delegations and powers associated therewith.

SBA alleges:

1) EDF intentionally failed to fund it’s loan loss reserve
2) EDF failed to monitor, evaluate, and timely regrade the risk level of the SBA 504 PCLP loans in portfolio
3) EDF maintained two sets of accounting books and records. One disclosed to the agency and one not disclosed.
4) EDF failed and refused to pay over $20 million in loss share due the agency
5) EDF is insolvent and not capable of paying it’s debts
6) EDF has approximately 334 non-performing PCLP loans with a balance of approximately $198 million
7) EDF potential PCLP loss reimbursement is approxamately $29 million
8) EDF loan loss reserve currently contains only $2 million, an amount grossly insufficient to protect SBA for a risk of loss

More news as it breaks.

Read the 82-page Order

 

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