The servicing retention amount is the portion of a pool loan interest payment that the seller retains for managing the loan. This amount is determined and paid according to the terms set out in the First Lien Position 504 Loan Pool Guarantee Agreement. Essentially, it compensates the seller for their role in servicing the loan, ensuring that they are rewarded for their management responsibilities.
This term is primarily used in the context of business loans, particularly those backed by the Small Business Administration (SBA). It is relevant in the fields of finance and business law, especially concerning loan servicing and guarantees. Users may encounter this term when dealing with SBA loan agreements or when managing loan pools. With the right tools, such as templates from US Legal Forms, individuals can navigate these agreements more effectively.
Here are a couple of examples of abatement:
For instance, if a seller services a pool loan with an interest payment of $1,000, and the servicing retention amount is set at 10%, the seller would retain $100 for their services. This ensures they are compensated for managing the loan effectively.
(hypothetical example) A small business owner secures a loan through an SBA 504 program. The servicing retention amount helps the seller manage the loan and ensure compliance with SBA guidelines.
| Term | Definition | Differences |
|---|---|---|
| Servicing Fee | A charge paid to a loan servicer for managing the loan. | Servicing retention amount is a subset of servicing fees specifically for pool loans. |
| Loan Pool | A collection of loans grouped together for funding purposes. | The servicing retention amount applies specifically to the interest payments of these loans. |
If you are involved in a pool loan agreement, ensure you understand the terms regarding the servicing retention amount. Review your loan documents carefully and consider using US Legal Forms' templates to assist with any necessary paperwork. If the situation is complex or you have specific questions, seeking professional legal advice may be beneficial.
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It is the portion of a pool loan interest payment retained by the seller for servicing the loan.