Small Business Administration Loans and Title Insurance
The Small Business Administration (SBA), a U.S. government agency, helps insure billions of dollars in loans to small business across the U.S. each year. Much like the U.S. Department of Housing and Urban Development (HUD), the SBA does not directly loan money to borrowers, it simply insures the loan, which is offered by approved private lenders. In 2014, the SBA insured $20 billion of financing through its most popular loan program, the 7(a) loan.
Small Business Loans Typically Require Lender's Title Insurance
While SBA loans may be taken out for a variety of purposes, if they are used to purchase commercial property, then the lender is likely to require lender's title insurance in order to protect their investment. And, even If they do not require this, it's still a smart idea for borrowers to take out an owner's title insurance policy, which can protect against common title defects, or perhaps even look into an enhanced title insurance policy or title insurance endorsements, which can protect against commercial title issues like UCC liens or mechanic's liens.
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