CEF Claim Information

Business Oregon provides the Credit Enhancement Fund (CEF) loan insurance program to support and grow businesses in Oregon through increased capital availability from our lending partners. A primary tenant of the program is a collaborative relationship between lenders and Business Oregon. Below is an outline of actions and information generally needed to facilitate a claim. Because most loan defaults have unique characteristics, a lender should contact Business Oregon early for a discussion of any problem loan where a default is anticipated.

Lender

Lender's responsibilities include exercising supervision over collateral monitoring and servicing insured loans as would be the normal industry practice of a prudent lender servicing uninsured loans. Prudent industry practices include periodic review of financial statements and collateral as is customary and prudent of similar loans. A lender should review the original bank credit memo, loan documentation and the loan insurance documents, and contact Business Oregon if there appears to be any significant deviation in the loan from the original approval.

Lenders should contact us if they have any questions on maintaining their insurance coverage.

Work Out Phase (prior to liquidation)

Lender should manage the work out as if the loan was uninsured. Contact Business Oregon when you have a significant down grade in the loan classification, loan delinquency over 30 days, are transferring a loan to special asset department or other negative change in the loan. Please provide us with the following:

  • Current loan status, balance and payment history
  • Collateral recap, updated values if available
  • Updated borrower financial information
  • Copy of demand letters if issued
  • Workout plan

Liquidation Plan

For loans that are headed for liquidation, contact Business Oregon as soon as practical so that we may work with you to process a possible claim. We will initially ask for the following:

  • Borrower name
  • Lender, contact, address, phone, e-mail
  • Loan payment history and balance
  • Collateral description, lien position, site visit, updated values, environmental or other issues
  • Updated financials from borrower and guarantors (usually required annually per the Loan Insurance Authorization)

Submit a Claim

When a lender is ready to submit a claim, it is anticipated that Business Oregon has been involved with lender in discussions on the loan status and work out plan. A claim can be filed prior to complete liquidation of the collateral or after all collateral is fully liquidated and judgments have been issued against guarantors. We request the following in addition to the information listed above:

  • Claim request on Bank or Attorney letterhead
  • Attorney name, address, phone and e-mail if applicable
  • Guarantors contact information
  • Strategy for liquidation of collateral
  • Estimated recovery amount listed by source (borrower, each collateral type, guarantors, etc.)
  • Court action taken or planned and litigation strategy, if any
  • Estimated budget for collection, liquidation litigation, and recovery expenses

Claim Review Process

Business Oregon will acknowledge receipt and review the claim with a goal of providing a status update and list of any additional information needed within two weeks. Simple claims—where Business Oregon has been apprised and involved in the work-out phase—should be paid within thirty days. If the claim is complex, the loan liquidation is unusual or the lender has failed to act in a prudent manner, Business Oregon will keep the lender informed about any delay in settlement of the claim.