Transcription of Lender and Development Company Loan Programs
1 SBA SOP 50 10 5(J) _____ Lender and Development Company loan Programs Office of Financial Assistance Small Business Administration SMALL BUSINESS ADMINISTRATION STANDARD operating PROCEDURE SUBJECT: REV SECTION NO. Lender and Development Company loan Programs 50 10 5(J) INTRODUCTION 1. Purpose: Update SOP 50 10 5(J) Lender and Development Company loan Programs . 2. Personnel Concerned: All SBA Employees 3. SOP Canceled: None. Previous edition of SOP 50 10 will continue to have applicability to loans that were approved during their effective time periods.
2 4. Updated Information: This is a full update of SOP 50 10 5, that is necessary for the SOP to conform to recently revised regulations in 13 CFR Part 120, and to provide guidance that clarifies and streamlines policy and procedures affecting the 7(a) and 504 Programs . Users are advised to fully read 50 10 5(J) to ensure understanding of the changes. This version, which will be SOP 50 10 5(J), includes the following significant changes: a. A final rule titled, Miscellaneous Amendments to Business loan Programs and Surety Bond Guarantee Program was published in the Federal Register on August 21 2017.
3 The final rule removed outdated or ineffective regulations and clarified others applicable to the 7(a) and 504 loan Programs . SOP 50 10 5(J) incorporates these regulatory changes. b. Updated guidance is provided in Subpart A regarding Lender and CDC authority and oversight. c. Certain sections in Subpart B have been updated to reflect current guidance on credit elsewhere, equity injection requirements, changes of ownership including partner buyouts, SBA Express terms, review of applications involving franchise, license, or similar agreements, and 912 processing.
4 Further, portions of existing Chapters have been relocated to other Chapters to align the placement of loan program requirements with the timing of required Lender actions ( , the hazard insurance requirements were moved to the section of the SOP governing collateral). d. Certain sections in Subpart C have been updated to reflect current guidance on refinancing existing debt, partner buyouts, energy public policy projects, special purpose properties, review of applications involving franchise, license, or similar agreements, and 912 processing.
5 5. Originator: Office of Capital Access AUTHORIZED BY: William M. Manger Associate Administrator Capital Access EFFECTIVE DATE January 1, 2018 Page 1 SOP 50 10 5(J) Effective January 1, 2018 Page 2 TABLE OF CONTENTS SUBPART A .. 5 PURPOSE OF THIS SUBPART .. 5 CHAPTER 1: 7(A) LENDERS .. 6 THE 7(A) loan PROGRAM .. 6 BECOMING A 7(A) Lender .. 6 HOW SBA OVERSEES 7(A) LENDERS.
6 15 DELEGATED AUTHORITY IN THE 7(A) loan PROGRAM .. 20 CHAPTER 2: SMALL BUSINESS LENDING COMPANIES .. 38 SMALL BUSINESS LENDING COMPANIES .. 38 PROCESS FOR ACQUIRING AN SBLC .. 39 CHAPTER 3: CERTIFIED Development COMPANIES .. 43 THE 504 loan PROGRAM .. 43 BECOMING A CDC AND OPERATIONAL REQUIREMENTS .. 43 THE PROCESS OF APPLYING TO BECOME A CDC .. 57 SBA OVERSIGHT OF 60 TYPES OF CDCS .. 67 AREA OF OPERATIONS .. 77 SUBPART B .. 83 PURPOSE OF THIS SUBPART .. 83 CHAPTER 1: GENERAL DESCRIPTION OF THE 7(a) loan Programs .
7 84 VARIOUS DELIVERY METHODS .. 84 USE OF loan PROCEEDS .. 84 SPECIAL PURPOSE LOANS .. 84 DEFINITIONS APPLICABLE TO THE 7(A) loan Programs .. 85 CHAPTER 2: ELIGIBILITY FOR 7(A) GUARANTY loan PROGRAM .. 86 INTRODUCTION .. 86 ELIGIBLITY REQUIREMENTS FOR ALL 7(A) loan APPLICANTS .. 86 INELIGIBLE TYPES OF BUSINESSES .. 98 ADDITIONAL ELIGIBILITY REQUIREMENTS FOR CERTAIN SBA 7(A) loan DELIVERY METHODS .. 119 ELIGIBLE USE OF loan PROCEEDS .. 121 CHAPTER 3: loan TERMS AND CONDITIONS .. 139 MAXIMUM loan AMOUNTS .. 139 MAXIMUM GUARANTY AMOUNTS.
8 139 loan MATURITIES .. 141 INTEREST RATES .. 145 SBA GUARANTY FEES .. 152 FEES LENDERS AND/OR THIRD PARTIES MAY COLLECT FROM AN 157 PROHIBITED FEES .. 162 DISCLOSURE OF FEES AND Lender EXPENSES .. 162 AGENTS .. 164 WHO MAY CONDUCT BUSINESS WITH SBA .. 166 CHAPTER 4: CREDIT standards , COLLATERAL AND ENVIRONMENTAL POLICIESSOP 50 10 5(J) Effective January 1, 2018 Page 3 .. 170 CREDITWORTHINESS/CREDIT UNDERWRITING .. 170 GUARANTIES AND COLLATERAL .. 183 ASSIGNMENT OF LEASE AND LANDLORD S WAIVER .. 193 REAL ESTATE APPRAISAL AND BUSINESS VALUATION REQUIREMENTS.
9 194 ENVIRONMENTAL POLICIES AND procedures .. 198 CHAPTER 5: loan AUTHORIZATION .. 206 BASIC loan CONDITIONS .. 206 CONSTRUCTION loan PROVISIONS .. 207 INSURANCE REQUIREMENTS .. 209 IRS TAX TRANSCRIPT/VERIFICATION OF FINANCIAL INFORMATION .. 209 SPECIAL PROVISION FOR CAPLINES .. 212 SPECIAL PROVISION FOR FRANCHISE .. 212 CHAPTER 6: SUBMISSION OF APPLICATION FOR GUARANTY .. 213 CONTENTS OF Lender S APPLICATION FOR GUARANTY .. 213 WHERE TO SUBMIT APPLICATION FOR GUARANTY .. 218 CHAPTER 7: POST-APPROVAL MODIFICATIONS, loan CLOSING & DISBURSEMENT.
10 220 POST-APPROVAL/PRE-DISBURSEMENT REQUESTS FOR CHANGES .. 220 TRANSFER OF GUARANTY BETWEEN PARTICIPATING LENDERS .. 222 PAYMENT OF GUARANTY 223 loan CLOSING AND DISBURSEMENT .. 223 CHAPTER 8: POST-DISBURSEMENT CHANGES, SECONDARY MARKET, SECURITIZATION AND Lender REPORTING (SBA FORM 1502) .. 247 POST-DISBURSEMENT CHANGES .. 247 SECONDARY MARKET FOR SBA-GUARANTEED LOANS .. 247 SECONDARY MARKET RESOURCES .. 248 loan TRANSFERS .. 248 loan PARTICIPATION SALES .. 249 SECURITIZATION AND OTHER CONVEYANCES .. 250 Lender loan REPORTING.
