The Freedom of Information Act is a federal law that provides the right to access information held by the federal government. The law provides that any person has a right to access records of federal agencies. There are exceptions but the law is designed to keep citizens in the know about our government.
In the case of Inspirador an “SBA 504 Authorization for Debenture Guarantee” was assigned with an official SBA Loan Number: 24404960-08. Once a loan number was assigned the records and documents of the loan file became accessible through the Freedom of Information Act (FOIA).
It appears from a letter written by Robert D. McGee (“Bob McGee”), President of Southwestern Business Financing Corporation had a seemingly desperate need to protect Ms. Wood’s SBA loan file and would only release it with a “valid subpoena”.
On April 16, 2008 BBVA Compass received two letters of cancellation for Ms. Wood’s SBA loan from McGee’s offices. It is noted that the letters are “contradicting”.
One letter states that the “the CDC has cancelled loan”
while the other letter states that the “borrower has cancelled their loan”.
Both letters are sent from Southwestern Business Financing Corporation on the same day. The letter reflecting the CDC had cancelled was signed by a closing officer. The letter reflecting the Borrower had cancelled was signed by Bob McGee. McGee had no consent from the Borrower and he did not disclose the letter.
Ms. Wood had taken numerous opportunities to obtain her SBA Loan file through FOIA. Access to the loan file would have been the only way the woman-owned business or legal counsel could fully understand what transpired in the loan transaction. Without access to the loan file any small business borrower would forever be left in the dark.
According to an SBA FOIA response letter to Ms. Wood’s requests her “loan file record was destroyed” due to the “status of the loan”. The April 16, 2008 cancellation letter McGee secretly submitted on behalf of the borrowers created a new “loan status”. By fabricating a change in the status of the loan McGee triggered the SBA records retention and destruction procedures to kick in. It’s a kill switch of sorts to,
Destroy the evidence.
The SBA 504 loan agreements were binding. McGee could not cancel the SBA Loan after the Borrower had cleared all of the conditions of the loan including her contribution of $510,000 towards the Total Project Costs. BBVA Compass Bank appeared to have performed on their end by funding both loans.
However, it was the concealed side deal between McGee and BBVA Compass that had them trapped in a transaction that could only end if the woman-owned business failed. She never did!
By secretly claiming the “borrowers have cancelled their loan request” the SBA sees it as a voluntary withdrawal from the loan assistance program without conflict and has no reason to look any further.
It is difficult to believe that any borrower would pay $510,000 into any loan transaction to: purchase real estate, complete construction, launch their start-up business and then cancel their loan.
*If you or someone you know has had an unfair experience or inexplicable experience with an SBA 504 Loan please contact us at: firstname.lastname@example.org