Samans Balance Sheet references an Asset as “A/R-SBA Loan Assessment” What about the “Notes Payable-MGC Mortgage” and the “Special Assessment-SBA”?
After Hurricane Hugo in 1989, it was necessary to borrow money through the SBA to complete the rebuild of Saman Villas. The loan was for approximately $600,000 at 4% interest for a term of 30 years. The collateral for this loan was a contingent assessment against all units; your share of this loan is the principal balance times your ownership percentage. The loan was sold by the SBA and is now serviced by MGC Mortgage, Inc. Monthly payments are made in the amount of $2,433 which included principal and interest. As the principal balance decreases, so do these three entries on the balance sheet.
