SBA requires a 100% payment and performance guarantee as well as project management risk insurance for all 7(a) loans for which more than $125,000 in SBA guaranteed revenue is used to directly finance construction. The goal is to ensure that construction is completed if the contractor does not. The borrower will use the entire proceeds of this loan exclusively as working capital to mitigate the economic damage caused by a disaster that occurred during the month of January 31, 2020 and will continue thereafter, and for loans of more than $25,000 for the payment of the Commercial Uniform Code (UCC) deposit fee and a UCC processing fee of $100, which is deducted from the loan amount mentioned above. Prior to the first payment, the lender must ensure that the borrower has received adequate insurance coverage, as described below. The lender must also ensure that the insurance remains in effect for the term of the loan: Sutton says that the waiver of personal guarantee for loans under $200,000 should be taken into account in the contract. „If the government were at the top, they would change the document,” Sutton says. He recommends that borrowers add their own endorsement, which finds that the loan does not involve a personal guarantee since the loan is less than $US 200,000. (Reserve: this does not seem possible with the platform used by the SBA.) The lender must require the borrower to outsource Confederation flood insurance or other appropriate risk insurance where FEMA (Form 81-93) indicates that a portion of the collateral, including personal property, is or will be in a particular flood risk area. The amount of flood risk insurance must be the lower of the insurable value of the property or the maximum coverage limit available, and the policy must contain a MORTGAGE REPAYMENT/LOSS CLAUSE (or equivalent) in favor of the lender. Borrowers who do not maintain the necessary flood insurance for the duration of the loan are not eligible for future assistance from the SBA. The only exception is that flood insurance needed for personal property guarantees cannot be purchased or is unaffordably expensive.. .