SMB Law Group LLP

??Breaking Business News The Trump Administration strikes again — foreign and undocumented individuals are banned from using SBA financing! Below is a full update. The team at SMB Law Group LLP will continue to monitor for updates on the situation. *** Client Alert: SBA Tightens Citizenship Requirements for 7(a) and 504 Loans Under Executive Order 14159 Effective March 7, 2025, the U.S. Small Business Administration (SBA) has revised its citizenship and residency requirements for 7(a) and 504 loan applicants to comply with Executive Order 14159 (Protecting the American People Against Invasion). These changes impact borrowers and lenders by imposing stricter ownership and documentation requirements. Key Updates for SBA Loan Applicants 1. Ownership Restrictions ? Businesses applying for SBA 7(a) or 504 loans must be 100% owned by U.S. citizens, U.S. nationals, or Lawful Permanent Residents (LPRs) (green card holders). ? Any ownership by undocumented individuals, visa holders, refugees, asylees, or DACA recipients renders the business ineligible. ? At least 81% of beneficial owners must be documented in SBA’s E-Tran system at the time of application. 2. New Certification and Verification Requirements ? Borrowers must certify their eligibility on SBA loan application forms, and LPRs must provide their alien registration number. ? SBA lenders must verify all ownership and immigration status through the Sacramento Loan Processing Center (SLPC) before loan approval. 3. Business Location and Loan Use Restrictions ? Businesses must be physically located and operating within the U.S. ? Loan proceeds cannot be used for international operations—all funds must benefit the U.S.-based entity. Considerations for Businesses and Lenders ? Loan applicants should review ownership structures to ensure compliance before applying. ? SBA lenders must implement additional verification procedures, increasing due diligence requirements. ? Businesses with mixed ownership structures may need to assess alternative financing options. Questions? This policy update may impact your business’s eligibility for SBA financing. If you have questions about compliance or need assistance evaluating your financing options, contact SMB Law Group at info<at>smblaw.group. This update is for informational purposes only and does not constitute legal advice. Please consult with an attorney for guidance specific to your situation.

Something huge coming from the SMB Law Group LLP team next week! ?? ?? Comment below if you’d like to be added to the list and get the first copy.

You're out there chasing money, wealth, power. Me? I live for compliments from bank counsel. Print it. Frame it. Hang it in the Louvre.

Pacific Palisades Businesses Lead the Recovery Effort: The recent fires in Pacific Palisades have left a trail of destruction, affecting not only homes but also the dreams and livelihoods of local business owners. However, these businesses are proving to be pivotal in the community's recovery process. Community Support: Local businesses are providing essential services like temporary shelter, showers, Wi-Fi, and telehealth appointments to aid in the recovery. Fitness Centers Offer Support: PlanetFitness and UFCGYM are providing free access to their facilities, including showers, Wi-Fi, and charging stations, for residents and first responders. SpaceX's Starlink Initiative: Elon Musk's SpaceX is distributing free Starlink terminals to ensure communication remains intact in affected areas. Airbnb's Housing Assistance: Airbnb is offering free temporary housing to those displaced by the fires, providing a semblance of normalcy. Restaurants Support Firefighters: Local eateries are offering free meals to emergency personnel, fueling the fight against the fires. GoodRx's Telehealth Services: GoodRx is providing free telehealth appointments to help residents replace lost medications due to the wildfires. Telecom Support: AT&T, Verizon, and T-Mobile are waiving charges and setting up free Wi-Fi and charging stations in shelters. Pet Boarding: A business is offering pet boarding services to support pet owners during this time. Financial Support: Quinn Emanuel has raised $500,000 to assist staff members who lost their homes. Fundraising Efforts: Business leaders like Barbara Corcoran are initiating fundraising for communities like Tahitian Terrace Mobile Home Park. Neighboring City Support: Cities like Long Beach are extending support to those in need. SBA Disaster Declaration: The SBA has declared a disaster, making assistance available for rebuilding and recovery costs. Legal Assistance: SMB Law Group is offering free pro bono legal support for businesses navigating SBA assistance. FBI Warning on Fraud: The FBI Los Angeles has issued a reminder about the risk of disaster fraud, advising caution during recovery. Please consider sharing or commenting on this post to increase its reach.

?? ?? IMPORTANT FINCEN BOI UPDATE ?? ?? In a perhaps not so unsurprising "Merry Christmas" move, the 5th Circuit Court of Appeals issued an immediate stay of the lower federal court's injunction issued earlier this month suspending the Corporate Transparency Act. As a result, the FinCEN beneficial ownership filing requirements remain in full force and effect. FinCEN has not yet publicly reacted or issued a statement on compliance, and it's possible that they grant a temporary reprieve beyond the end of the year, as any company formed prior to January 1, 2024 will technically be in non-compliance and subject to penalties starting January 1, 2025. Any company formed in 2024 has 90 days from the date of filing, so if you haven't filed yet, you may already be behind. Starting January 1, 2025, all newly formed companies required to file a BOI report are required to file within 30 days. Some estimates put current non-compliance at a breathtaking 80-90%, so this could get interesting. Sorry for the holiday surprise, but Merry Christmas, Happy New Year, and make sure to get your information submitted to the federal government! We'll keep you posted as we know more.

?? Important FinCEN BOI Update ?? The U.S. Federal District Court for the Eastern District of Texas has denied the government's request to "stay" enforcement of the preliminary injunction issued by the same court a couple of weeks ago. Let's break down what that means. We've discussed before the the recent preliminary injunction barring enforcement of the BOI filing regime was almost immediately appealed to the 5th Circuit by the government. In connection with that appeal, a motion was filed with the District Court to "stay" the enforcement of the injunction pending appeal. Basically, they argue that they have a strong enough case on appeal that the district court should pause enforcement of the injunction until the 5th Circuit rules on the appeal (which will take some time). Just moment ago, the U.S. Federal District Court for the Eastern District of Texas (the court that issued the injunction) denied the government's request to stay the injunction pending appeal. That's good news, signaling for now that the BOI filing requirement remains unenforceable. Though it's important to note that the 5th Circuit can issue their own stay, which the government has asked them to do. So continue to stay tuned, as there's at least some likelihood of that happening. But at least for today, the injunction has survived its first challenge.