September 4, 2013
By Bob Coleman
Editor, Coleman Report
Starfield & Smith’s Norman Greenspan has penned a fascinating article describing the process SBA undertakes to suspend or debar someone from its lending programs.
The takeaway? If SBA wants you out of its programs, the agency has the tools at its disposal to get you out.
Here are some of the grounds for suspension or debarment.
Failure to maintain eligibility requirements for SBA programs;
Failure to comply materially with any Loan Program Requirement;
Making a false statement or failure to disclose a material fact to the SBA;
Not performing underwriting, closing or servicing in a commercially reasonable manner;
Engaging in a pattern of uncooperative behavior with the SBA;
Repeated failure to correct deficiencies;
Any other reason that the SBA determines may increase the SBA’s financial risk.
Norm concludes, “This list is pretty comprehensive. Clearly, the conduct that can result in suspension or debarment does not have to be criminal. There is a lot of discretion that the SBA has in deciding whether to take an enforcement action, what that action will be, and for how long.”