Does anyone happen to use Bankers Systems Form BSP dated 7/10/96? It is the Business Purpose Statement and my understanding it is to be used when a commercial loan is made to an individual. Just trying to get a better understanding of why we need this form. I am not sure it is a state specific form. Or does anyone use something similar to this for their commercial loans? Thanks.

I have not seen the form but one possible reason for it is that a business purpose loan does not require Reg Z disclosures, etc., and this form documents that purpose.

Our current doc prep system incorporates the purpose statement (consumer, business, investment(?)) on the Disbursement Authorization form. I believe that SJB is right about the reasoning. However, if the rest of the file doesn't suport the "business purpose statement" I would imagine that this form wouldn't mean squat.

Ari: For questions about Bankers Systems forms it is best to call Bankers Systems supportline directly. There are some states that require a Business Purpose Statement, some for which it is optional, and some that require a Business Purpose Affidavit. I can't tell from your post which state or states you are interested in.

I've done a little more research and it appears it may be a "custom" BSI form. We are in multiple states in the southeast and it is a general form that is part of each states documentation package. From what else I can determine, the form is to be used when a loan is made to an individual where the collateral is the individual's home but the "purpose" of the loan is business. It is just another piece of documentation that specifically states that the proceeds of the loan will not be used to purchase or maintain the borrower's home thereby making it appear to be a "consumer" rather than a "business" loan. Thank you.