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12) Written SBA approval is granted 5-7 days after verbal confirmation. The SBA <br /> commitment is valid for one year. <br /> • <br /> 13) A closing is scheduled between the bank and the SBC. The bank acts as <br /> interim lender on the project, advancing both the bank and SBA funds to the <br /> SBC, enabling work on the project to commence. <br /> 14) Construction, additions and/or remodelling, and purchase of machinery and <br /> equipment take place. (Be certain to save cancelled checks or paid invoices on <br /> the work performed, in order to demonstrate owner's equity injection into the <br /> project. <br /> Soon after loan approval is granted, the SBC is advised to begin the process by <br /> which life insurance in the amount of the SBA loan is collaterally assigned to <br /> the SBA. <br /> 15) SBA portion of the loan is closed only when all funds have been disbursed and <br /> construction/remodelling is complete. <br /> 16) SBA closing process occurs in three stages: <br /> • A) Preclosing Meeting - CMDC attorney and Administrator meet with SBC <br /> to discuss the checklist of required closing documents. SBC is given a <br /> short list of documents to obtain. CMDC works directly with <br /> borrower's attorney and insurance agents to prepare for closing meeting. <br /> B) Closing Meeting - Typically held four weeks after the preclosing, this is <br /> the time that formal documents of indebtedness are signed. <br /> C) Debenture Sale - Occurs approximately six weeks after the formal <br /> closing meeting, on the second Wednesday of the month. The interest <br /> rate on the SBC's loan is not set until these bonds sell, therefore, the <br /> rate of interest is unknown to the SBC on the day of closing. <br /> NOTE: The $1,500 deposit is refundable to the SBC at this stage. <br /> 17) SBC pays interim interest to the bank until the date of the debenture sale. <br /> Colson Services Corporation (the fiscal agent for the SBA) wire transfers <br /> government funds directly to the bank, bringing the bank down to its permanent <br /> mortgage level. <br /> 18) SBC makes two payments each month - one to the bank, one to the SBA. The <br /> SBA automatically debits the SBC's bank account on the first day of each <br /> month. The first SBA payment occurs on the first day of the month directly <br /> • following the debenture sale. <br /> -2- <br />