Securing the capital needed to grow your Savannah business, particularly through complex federal programs like the SBA 7(a) or CDC/504 loans, requires more than just solid financials. As a borrower, your preparation will determine the success of the transaction and will protect your long-term interests.

Here are the essential Dos and Don’ts to guide your path to funding:

Essential Do’s

1. DO Master the SBA and SOP 50 10 Compliance: Your funding is contingent upon strict adherence to the SBA’s SOP 50 10 requirements. Ensure your business eligibility and intended use of funds are compliant to prevent structural errors that can lead to guaranty denial or delayed closing. Don’t worry, we have experienced attorneys in these federal mandates that can help!
2. DO Prepare for Intense Due Diligence: The lender will extensively vet every claim. Prepare for comprehensive third-party review, including:
   • Financial Integrity: Submit consistent, verifiable financial statements and justifiable projections.
   • Collateral Review: Cooperate fully with independent appraisals and title/environmental assessments, especially for real estate in the Low Country area.
3. DO Understand Your Security Obligations: It’s important to know exactly what assets you are signing away. Your counsel should review the lender’s plan for perfection, ensuring you understand the implications of filing UCC-1 Financing Statements (for assets) and Deeds to Secure Debt (for Chatham County real property).

Critical Don’ts

1. DON’T Submit Inconsistent Financials: Never submit financial data that is contradictory or unsupported by historical performance. Any perceived lack of transparency will trigger costly delays and negatively affect lender confidence.
2. DON’T Sign Personal Guarantees Blindly: Most commercial loans require an Unconditional Personal Guarantee from principal owners, placing your personal assets at risk. While often unavoidable, your attorney must review the terms to ensure you fully understand the scope and consequences of the liability.
3. DON’T Seek Informal Loan Modifications: If your business faces distress post-closing, never rely on verbal agreements for forbearance or extensions. Any change to the loan terms must be formalized, documented, and executed through a Loan Modification Agreement reviewed by your legal counsel.

Approaching the lending process with professional diligence and experienced legal support is the only way to successfully secure capital and build a durable foundation for your Savannah business.

Disclaimer: This blog post is for informational purposes only and does not constitute legal advice. Contact us for advice regarding your individual situation.