The cause was bad loans to Smith-controlled companies, which exceeded the bank's legal lending limit.
By engaging other banks as participants, the lead bank can remain within its own legal lending limits and still come up with sufficient cash for funding.
A bank's lending limit is linked to the amount of capital it has set aside as a cushion against potential losses.
Banking legislation passed late last year required regulators to set the new lending limits.
SBA can approve a loan for the total replacement cost up to our lending limits.
For its best customers, millions of dollars were advanced, often without documentation and sometimes in violation of the bank's own lending limits.
It is not acting on a White House request to reduce the agencies' lending limits, which could cool the market.
The maximum lending limit varies by county, but may not exceed $625,500.00.
In instances where the commercial property backing the loan is only partly developed, the lending limit would be 70 percent.
As for the risk factors, there is a lending limit of 60 % of the value of the property.