SBA lawyer Phoenix, AZ

SBA lawyer Phoenix, AZSBA EIDL Board Resolution or Certificate and Proof of Insurance.

Borrowers who took an SBA EIDL loan in the initial stages of the Covid Pandemic may have to meet different requirements after the loan has funded. A board resolution or certificate may be required for different business entities. Proof of insurance may also be required for loans that exceed $25,000.

Most borrowers who took an SBA Economic Injury Disaster Loan during the initial stages of the Covid Pandemic, may not have read their loan agreement carefully, but indeed there are different post-funding requirements, as an SBA lawyer Phoenix, AZ can explain.

SBA Certificate and/or Resolution

What are the post-funding requirements? If your loan was taken for an entity other than an independent contractor or sole proprietorship, you would need to provide a board resolution or certificate. If you look at page 7 of your loan closing documents you will find the following:

 This simply means that you would need to supply a board resolution or a certificate to the SBA within 180 days of receiving any funding from the EIDL loan. Which document do you have to supply? An SBA Certificate and/or a Resolution? It is simple actually(PLEASE NOTE: this document is likely required if your loan was taken by your business, and should be required even if you are a single-member corporation or LLC).

Sole Proprietorship- No Certificate or resolution required

Independent Contractor – No Certificate or resolution required

Corporation – Board Resolution

Non-Profit Corporation – Board Resolution

S-Corporation – Board Resolution

LLC- Certificate

LLP – Certificate

LLC taxes as an S-Corporation- Certificate

Duty to Maintain Hazard Insurance

In addition, to the above requirements. If your business received an SBA EIDL loan of more than $25,000  you would have to provide proof of an active hazard insurance policy, as noted by an SBA lawyer in Phoenix, AZ. The language for this requirement is found on page 4 of your loan authorization and agreement and reads as follows:

Because the SBA takes a collateral interest in the property of the business (page 2 of your Loan Authorization and Agreement) they are simply ensuring that such collateral is protected in case of loss. You can submit to the SBA the required policy coverage to ensure it meets the requirement of your Loan Authorization and Agreement.

Below we include samples of board resolutions or certificates:

Sample Board Resolution for a Corporation, S-Corporation, or Non-Profit

(Date)

(Application or loan number)

(Company Name)

 

This letter shall serve as confirmation of the following:

(Company Name) held a board meeting.

The Board authorizes acceptance of the SBA Loan in the amount of (Loan amount[1]).

The Board designates (Name of the person who signed), (title i.e. President, Vice President, Secretary) of (Name of company) to sign the loan closing documents.

(Signature)

____________________

(Name of signer)

(Title of Signer)

(Name of Company)

 

 Sample Certificate for an LLC

(Date)

(Application or loan number)

(Name of LLC)

 

This letter shall serve as confirmation of the following:

(Name of LLC) held a meeting.

The LLC authorizes acceptance of the SBA Loan in the amount of (Loan amount[2]).

The LLC designates (Name of person who signed), (title i.e. Manager or Member) of (Name of LLC) to sign the loan closing documents.

 

(Signature)

____________________

(Name of signer)

(Title of Signer)

(Name of LLC)

 

[1] Please Note: If you received a loan of over $25,000 your loan amount would be $100 more than the amount that was deposited into your account, as $100 of the loan proceeds are used to pay the Uniform Commercial Code Funding fee

[2] Please Note: If you received a loan of over $25,000 your loan amount would be $100 more than the amount that was deposited into your account, as $100 of the loan proceeds are used to pay the Uniform Commercial Code Funding fee

If you want to learn more about indeed the different post-funding requirements, an SBA lawyer Phoenix, AZ can explain. Contact at Saavedra Law Firm, PLC, today.

 

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