Information for Current Borrowers
SomerCor is here to help you. Our servicing team is dedicated to helping you with your needs over the entire lifetime of your loan. Contact us at [email protected] or (312) 360-3300
Who should I contact if I have a problem with my loan?
It is very important that you contact your SBA loan analyst at SomerCor with any issues you may have or changes that take place regarding your loan. The Loan Servicing Department is here to help ensure that your loan is always in compliance.
David Sommers
EVP, Loan Servicing Director
[email protected]
(312) 360-3322
Sue Skinner
Loan Servicing Administrator
[email protected]
(312) 360-3309
Loan Servicing FAQs
- How can I check my loan balance?
- Can I get online access to my account?
- Will I receive a monthly statement?
- How do I pay off my loan?
- When will I get my 1099 interest statement?
- How can I change the account my 504 loan payment is deducted from?
- Can I change my loan date?
- Can I pay off my loan early? Are there prepayment penalties?
- Do I need to let you know if I change insurance agencies?
- How do I change reporting of loan interest?
- Need a document?
- How do I submit annual financials?
- How do I submit Insurance Policies/changes or renewals?
- How do I change my contact information?
- Behind on a payment?
- Is there a “grace period” on my loan?
- What is the role of a CDC?
- What is a loan deferment?
- What is a short sale?
- What is a foreclosure?
- If I default on my loan, what will happen?
- What can I do to avoid these serious issues?
- How do I make payments on my 504 loan?
- Can I make additional payments to pay down the principal?
- What are the servicing fees shown on my amortization schedule for?
- Is the ACH debit optional?
- My payment was rejected. Will Guidehouse try again later in the month?
- Is there a late fee?
- How will I know what interest I’ve paid?
- During the term of the loan, will Somercor help me obtain approval for structural changes on my loan?
- What are the annual reporting requirements of my loan?
- What are site visits?
- What if I want to expand my existing building? Can I apply for additional financing if I haven’t paid off my existing 504?
Loan Servicing Basics
Will I receive a monthly statement?
No, the SBA does not issue monthly statements. You can refer to your amortization schedule for payment and balance information.
How can I check my loan balance?
You can view your loan balance at any time per your amortization schedule which was provided to you in your Welcome Package when your loan was funded. Your amortization schedule is a breakdown of your monthly loan payment for the life of your loan. This is provided to you in lieu of monthly statements.
If you need further assistance with your loan balance or need a new copy of your amortization schedule please call (312) 360-3300 or email David Sommers at [email protected].
IF YOU HAVE AN SBA DISASTER LOAN, please call (800) 487-6019 or (800) 659-2955 as we do not have direct access to information on these loans.
Can I get online access to my account?
Yes, the SBA has recently announced the launch of its MySBA Portal for borrowers with 504 loans in regular servicing. By using the link provided below you can sign up as a new user by clicking the Register for MySBA button and following the prompts. Please note that you will need your SBA loan number to initially generate an account. Once the account is created, all SBA loans tied to that individual’s Social Security Number will be linked to this account and be available for view on your MySBA Dashboard page.
Register for the MySBA Portal here: https://lending.sba.gov/
Please remember that you can follow the amortization schedule for any loan payment information and refer to your loan documents in the black folder that was issued to you after your loan funding for important loan details.
Will I receive a monthly statement?
No, the SBA does not issue monthly statements. You can refer to your amortization schedule for payment and balance information.
How do I pay off my loan?
A payoff amount can be requested from David Sommers at [email protected] with a 45 day notice. This advanced notice is necessary to accurately calculate the loan payoff amount and schedule the loan payoff.
When will I get my 1099 interest statement?
The 1099 interest statement is prepared by Guidehouse (SBA servicing agent). This statement is provided to SomerCor 504 on or before January 31 of each year. Should you need this information to prepare your taxes and cannot wait until January 31, it is available from your amortization schedule. Please refer to the amortization schedule.
How can I change the account my 504 loan payment is deducted from?
To change your ACH information for your loan payment, please contact Sue Skinner at [email protected]. Please note that the updated bank account information must be submitted before the 15th of the month to have the loan payment be debited from the new bank account for the following month.
You’ll simply fill out a new “ACH Debit Authorization” form. Please call our Servicing Department and we will send it to you. Account changes must be made by the 15th of the month to take effect in time for the next month’s payment. If the 15th falls on a weekend, it must be received before the end of the prior business day.
If you want to change the account that is debited for your monthly payment, you can submit a new ACH (Automated Clearing House) and/or auto debit authorization form and cancelled check to SomerCor. The form must be received prior to the 15th of the month to take effect the following month. We can only deduct the authorized payment amount. The account cannot be debited on any unauthorized day of the month.
Please mail, fax, or email the completed ACH form to Sue Skinner.
Email:
[email protected]
Fax:
(312) 757-4370
Mail:
SomerCor
209 S. LaSalle St
Suite 203
Chicago, IL 60604
IMPORTANT: Sometimes the automatic payment is rejected. Reasons include insufficient funds, uncollected funds, the account is closed or invalid or a borrower stops the automatic payment on their own. When this occurs, please do the following:
Contact Sue Skinner immediately at [email protected] or (312) 360-3309 and confirm that the loan remains on automatic debit (ACH). If it is not, submit a new ACH form prior to the 15th of the month for enrollment in the next month’s auto-debit.
Can I change my loan date?
Your loan due date cannot be changed per SBA policy. Your loan payment will always be due on the 1st of the month for the life of loan.
Can I pay off my loan early? Are there prepayment penalties?
Yes and yes. However, typically the rate on your first mortgage loan is higher than the 504 rate, so it’s to your advantage to make additional payments on the first mortgage loan rather than pay off the 504 loan.
If you choose to pay off your 504 loan early, the duration of the prepayment penalty depends on the term of the loan. Typically, 504 loans are 20 year or 25 year loans, which carry a 10 year prepayment penalty. The amount of the penalty depends on the debenture rate assigned to your loan. For instance, if the debenture rate was 2.5%, it would decline 10% every year for ten years. After 10 years there would no longer be a prepayment penalty.
In addition to the prepayment penalty, interest and servicing fees (not the CDC servicing fee), through the next semi-annual debenture date are included in the payoff. The debenture dates are based on the funding date of your loan. Our Servicing Department can walk you through the details.
Do I need to let you know if I change insurance agencies?
Yes. Please send us the contact information for the new agency, including the new policy number.
How do I change reporting of loan interest?
If you would like to change the reporting of interest on your loan to the IRS, please complete a W-9 form with the new name(s) and tax ID to our servicing team. Please be sure to include your loan number, your name, the company name and property address.
If you need to request a copy of your 1098 Interest Paid Statement please send an email to the servicing team. Please note that we do not receive the information prior to January 31st.
[email protected] or (312) 360-3322 Sue Skinner, Loan Servicing Administrator
[email protected] or (312) 360-3309
Need a document?
We can provide borrowers with copies of their loan documentation, amortization schedules, and more.
Simply send a request in an email to Sue Skinner at [email protected] with the following:
- Your name
- Company name
- Loan number
- Property address
- List of documents you are requesting
Please note: this information is only provided to the borrowers of record on the loan. To provide this information to anyone not listed as a borrower, we require written permission in advance from the borrower.
How do I submit annual financials?
SomerCor requests current financial information such as tax returns on an annual basis. Please submit them by one of the following:
Email Sue Skinner at [email protected] and receive a secure link to upload files. Please do not email sensitive information.
(312) 757-4370
Mail:
SomerCor
209 S. LaSalle St
Suite 203
Chicago, IL 60604
How do I submit Insurance policies/changes or renewals?
Somercor must, at all times, have a current copy of the required Insurance Policy for the building and/or business personal property used as collateral to secure the loan. We will periodically contact you or your agent and request proof of insurance. At that time, we also ask that your insurance agent provide the following:
- Common Policy Declarations
- Mortgagee and Lender’s Loss Payable Provisions Endorsements
- Full Replacement Cost
- 10-Day written notice of cancellation
- Insured name, loan number, collateral location, policy number, coverage amount and coverage dates
SBA/SomerCor should be named as Mortgagee and/or Lender’s Loss Payable as follows:
209 S. LaSalle St
Suite 203
Chicago, IL 60604
Please send evidence of insurance to Sue Skinner at [email protected]
How do I change my contact information?
If any of your contact information changes, please let us know as soon as possible.
To change your contact information please email your new information to one of our servicing team members:
[email protected] or (312) 360-3322 Sue Skinner, Loan Servicing Administrator
[email protected] or (312) 360-3309
Please include the following in your email:
- Your name
- Business name
- Loan number
- Your phone number (in case we need to reach you)
Behind on a payment?
Understanding your options when facing loan delinquencies and defaults
SomerCor has seen proven business owners, some with decades of management experience, struggle with cash flow due to the various challenges businesses encounter. If your company is facing this situation – you are not alone.
We have worked diligently with hundreds of our borrowers on mutually beneficial solutions to their repayment challenges.
Borrowers who have trouble meeting their debt obligations should contact us as early as possible to discuss the situation and options that may be available to assist you. Our experience has found that keeping communication channels open yields the best results for the borrower as well as the lender.
Please contact us as soon as possible when you realize you may have challenges meeting your loan obligations. Please reach out to David Sommers at [email protected] or (312) 360-3322.
Here are a few common questions that our borrowers pose when their loan becomes delinquent or defaults:
Is there a “grace period” on my loan?
Your loan is due on the first business day of every month. The terms of your loan agreement require the payment to be made by Automated Clearing House (ACH) transfer from your bank to Guidehouse, also known as the Central Servicing Agent (CSA). If your payment is rejected when the ACH transaction occurs, you may wire the funds as an alternative. To avoid any late fees, your loan payment must be posted at Guidehouse by the 15th of the month. To discuss this further with a CDC representative, contact:
David Sommers, EVP, Loan Servicing Director
[email protected] or (312) 360-3322
What is the role of a CDC?
CDCs, like SomerCor, are contracted by the SBA to serve as an intermediary for your loan. When you secured your loan, the second trust deed portion was packaged, underwritten and funded with SomerCor’s management. After your loan funds, SomerCor is responsible for monitoring your repayment and loan covenant(s) compliance. Your loan is an obligation to the U.S. Small Business Administration (SBA), an Agency of the U.S. Government – not SomerCor. SomerCor makes recommendations to the SBA on actions associated with your loan, which SBA reviews and either approves or denies.
What is a loan deferment?
When borrowers provide SomerCor with financial statements (tax returns, personal financial statements, interim business financials, and other requested information) that indicate their business is operating with historically lower revenues and tighter cash flow, a loan deferment may be offered. A deferment typically provides a lower monthly payment amount to provide cash flow relief. The principal and interest obligations remain in force, but the payment amount is adjusted for the “deferment period”. When that period ends, the “catch up period” commences and the monthly payments increase. The full amount of the deferment must be repaid within 5 years, or no later than the end of the existing term of the loan if the loan has a maturity date of less than five (5) years remaining. For more information about a deferment plan, contact:
David Sommers, EVP, Loan Servicing Director
[email protected] or (312) 360-3322
What is a short sale?
When a property is sold for less than what is owed on it, it is referred to as a short sale. All owners, lenders, and/or parties holding a valid lien on title must agree to the transaction before the sale can occur. The borrower remains obligated for the outstanding balance owed after the sale is completed and works with the lender(s) to develop a repayment plan for the balance due. For example, if a borrower’s debt on a building is $500,000 and the building is sold for $450,000, the borrower remains obligated on the outstanding $50,000 loan balance and may repay that amount either in a lump sum or over a period of several years. For more information or consideration of a short sale on your building contact:
David Sommers, EVP, Loan Servicing Director
[email protected] or (312) 360-3322
What is a foreclosure?
When a borrower does not pay as agreed to in their loan note, the lender has the right to sell the property without the borrower’s consent through a foreclosure process. Foreclosure processes vary from state to state.
If I default on my loan, what will happen?
When you received your SBA loan, you agreed to repay the entire balance. Most SBA loans have several “obligors” or “guarantors” that signed the note. Each obligor or guarantor is solely responsible for the entire outstanding balance of the loan.
For example, if two business partners secured a loan for $100,000 and the loan defaults, both partners are responsible for the outstanding balance until the loan is paid off. The debt obligation is not divided among responsible parties. If the debt is not repaid or compromised, the loan file is referred to SBA and then to the U.S. Department of Treasury (DOT).
The SBA has the right to impose Administrative Wage Garnishments on all parties until the balance is paid. DOT has the right to withhold future income tax refunds, social security benefits, veteran benefits and other means of collection available to them, including legal action until the full balance of the loan is repaid. These actions may be imposed on all obligors and guarantors on the note. Additionally, the loan default is reported to all credit agencies which impacts credit scores and ability of obligors and guarantors on their ability to secure conventional and SBA financing in the future.
What can I do to avoid these serious issues?
We suggest that you contact SomerCor and your first mortgage holder (bank) as early as possible and work collectively toward alternatives to default and foreclosure. SomerCor has the right to work with all debtors on their SBA 504 loan toward a warranted repayment strategy or compromise which is then presented to the SBA for their consideration and is formally approved or denied. We have successfully completed justifiable loan deferments as well as long term repayment strategies on outstanding loan balances after short sale or foreclosure, which are manageable for borrowers and allows them to fulfill their loan obligation without impacting their long term credit.
SomerCor has found over and over again that the earlier a borrower, obligor or guarantor informs us of their challenges – the better the options available for resolution. Lenders and borrowers enter into debt obligations in good faith and the extension of credit is based on the promise by borrowers to repay. It is important borrowers act in good faith when negotiating solutions with your lenders as this allows the lenders to review all repayment options at borrowers disposal. Keep in mind lenders have the same objectives a borrowers does – to resolve the matter in a respectful and expeditious manner to the satisfaction of all parties.
You can always call us at (312) 360-3300. We do our best to have a real, live person answer your calls so you are helped quickly and efficiently. We are available Monday through Friday from 8am to 5pm CST.
Updating Your Information
How do I make payments on my 504 loan?
At closing, documents are signed authorizing an automatic deduction of your loan payment from your bank account. This process is referred to as ACH debit. Guidehouse will make the deduction from your account on the first business day of every month. The payment date cannot be changed.
Can I make additional payments to pay down the principal?
Unfortunately no. Due to the funding structure of 504 loans, additional payments cannot be accepted.
What are the servicing fees shown on my amortization schedule for?
The SBA fee covers any losses SBA incurs as guarantor of the 504 Loan.
The CSA is Guidehouse. This fee covers Guidehouse’s handling of payment processing and loan accounting.
The CDC is SomerCor. We are responsible for servicing your loan on behalf of SBA. The CDC fee is set forth in the Code of Federal Regulations and cannot be waived.
Is the ACH debit optional?
The ACH debit is required.
My payment was rejected. Will Guidehouse try again later in the month?
No. Please contact our David Sommers at (312) 360-3322 or [email protected] as the payment must be sent via wire transfer.
Is there a late fee?
Yes, if the payment was rejected and the wire transfer is not received by the 15th of the month, or the business day prior to the 15th if it falls on a weekend. It is the greater of 5% of your payment or $100.
How will I know what interest I’ve paid?
An annual Interest Statement will be mailed to you by January 31st of each year.
During the term of the loan, will Somercor help me obtain approval for structural changes on my loan?
Yes. SomerCor’s Servicing Department can help you:
- Substitute equal or greater equity in like kinds of collateral.
- Subordinate to new third party financing.
- Make changes to life or hazard insurance.
- Release insurance proceeds for the repair or replacement of damaged collateral.
- Approve changes in form of business structure (i.e. LLC, LLP, Sub-S Corp, etc…)
- Assumption of the loan by a third party
- Substitution of or release of guarantors.
What are the annual reporting requirements of my loan?
Evidence of insurance: Hazard, Life, etc.
Annual business tax returns and/or signed financial statements
When the loan reaches its two year anniversary, SomerCor will need current information on the number of employees (full-time, part-time and seasonal) at your company.
What are site visits?
The goal of the site visit inspection is to inspect and inventory the collateral items. This may include reconciling any equipment and comparing it with the original collateral information as well as assessing the condition of the collateral. Digital pictures are something that helps us to verify the existence and condition of the collateral.
SBA requires that we complete site visits in certain circumstances. However, we also like to visit and say hi and thank you for your business when we are in the area.
What if I want to expand my existing building? Can I apply for additional financing if I haven’t paid off my existing 504?
It’s quite possible that you are eligible for additional SBA loans. The 504 maximum lending limit is currently $5 million ($5.5 million for manufacturers), so most existing customers are eligible for multiple 504 loans. The funds available to you can be used to expand an existing building or purchase equipment and the 504 loan application process is typically easier the second time around. Contact a Loan Officer for more information.