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B-181432 1 (1978-10-20)

handle is hein.gao/gaobadgnb0001 and id is 1 raw text is: -A a0 OECISICN ..WT ..*THE COMPTFILLER GENERAL 1- )o~ THif UNI rT!D AT VVA HINGTON, C.0. 20548 #i-- . FILE: B-181 MATTER OF DIGEST: 432 DATE: October 20, 1978 : Small Business Administration Purchase of Loans When Guaranty Fee is Not Paid Prior to Default 1. Provisions in Small Business Administration (SBA) Guaranty Agreement which ctate that (1) until required fee is pald, loan is not covered by SBA guarantee and (2) fee must be paid by the lending institution within five days of the first disbursement of the loan, create condition precedent binding'on the lending institutions and SBA. While the re4uirement that the fee be paid within five days is not necessarily a material one, the requirement foir payment of the fee prior to the borrower's $efault'is cncial to Govern- ment's interests and SBA may not purchase the guaranteed loan if the fee has not been paid prior to default. B-181432, March 13, 1975, is affirmed. 2. Our decision 9-181432, March 13, 1975, which held that under. Guaranty Agreement Small Business Adrizinistration (SBA) could not pircli se guatranteed loan if required guarainty fee had not been paid by lender befe're loan went into default is affirmeu. Noofficer or agent of Government has authority to waive this type of contractual right which has accrued to the United States without compensating benefit. Moreover, SBA is not estopped friom enforcing guaranty fe2 provision since 4 - step test for estopp ing Government ha: not been satisfied. This decisiin 1 in response to a request from the Admin- istrator of the Small Business Adinin'stration (SBA) for our Office to rec6nsider our ruling in B-181432, March 13, 1975. In that decision, we concluded that under the language of the Blanket Guaranty Agreement in effect between SBA and lending institu- tions participating in SBA's guaranteed loan program, SBA could not purchase a. guaranteed loan if the requit ed guaranty fe had -1- 2 'as- 66.-dr I I

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