SBA SOP 50104e: Loan Processing

1 Processing SOPSOP 50-10(4)(B)Effective 01-29-99iSOP 50-10(4) EXECUTIVE 1 SUBPART A - POLICIES APPLYING TO ALL business 3 CHAPTER 1 - GENERAL 3 CHAPTER 2 - business LOAN 7 CHAPTER 3 - 71 CHAPTER 4 - 81 CHAPTER 5 - LOAN 97 CHAPTER 6 - LOAN Processing B - POLICIES SPECIFIC TO 7(a) C - SPECIAL PURPOSE D - 1 - 2 - CERTIFIED LENDERS 3 - PREFERRED LENDERS 4 - SMALL business LENDING COMPANIES (SBLC)..355 Processing SOPSOP 50-10(4)(B)Effective 01-29-99iiCHAPTER 5 - SBA PILOT H - DEVELOPMENT COMPANY LOAN PROGRAM (504)..361 CHAPTER 1 PURPOSE OF THE 2. APPLICATION PROCESS TO BECOME A 3 AREAS OF 4 CDC'S ORGANIZATIONAL 5. EXPANDING A CDC'S AREA OF 6. ACCREDITED LENDERS PROGRAM (ALP)..395 CHAPTER 7. PREMIER CERTIFIED LENDERS 8. ASSOCIATE DEVELOPMENT COMPANIES (ADCS)..405 CHAPTER 9. ETHICAL 10. PROJECT ECONOMIC DEVELOPMENT 11. ELIGIBLE AND INELIGIBLE 504 12. INTERIM 13. THE SOURCES OF PROJECT SOPSOP 50-10(4)(B)Effective 01-29-99iiiCHAPTER 14.

2 15. BORROWER'S 16. MISCELLANEOUS SERVICING 17. MISCELLANEOUS DEBENTURE 18. 504 APPLICATION PROCEDURES AND CONTROLS ..475 CHAPTER 19. PRICING A 20. PREPARING THE LOAN 21. DEBENTURE SALES AND SERVICE 22. 23. ALLOWABLE 24. OVERSIGHT AND EVALUATION OF CDCS AND 25. IMPACT OF CURRENT RULES AND LAWS ON SOPSOP 50-10(4)(B)Effective 01-29-99ivPROCESSING SOPSOP 50-10(4)(E)Effective: 12-01-00v TABLE OF 1 WHAT IS THE PURPOSE OF THIS SOP?.. 1 SUBPART A - POLICIES APPLYING TO ALL business 3 CHAPTER 1 - GENERAL DOES THIS SUBPART COVER?.. OF THE business LOAN 7(a) Microloan Demonstration Development Company Loan Loan USED IN THE business LOAN 5 CHAPTER 2 - business LOAN AND POLICES APPLICABLE TO ALL Should Eligibility Be Determined?.. Eligibility Be Considered Prior To Formal Application?.. Has Authority to Make Eligibility Determinations?.. REQUIREMENTS FOR business of the Form of business Entity on Businesses Restrict to Whom They Sell or Provide Service?

3 8c. Can One Loan Be Used To Assist More Than One business ?.. 9 Processing SOPSOP 50-10(4)(E)Effective: a For-Profit business Owned By a Non-Profit Entity Eligible?.. Money be Borrowed for Operations in Another Country?.. is the Need for a Loan Demonstrated?.. Up Businesses?.. 'S CREDIT ELSEWHERE Credit Elsewhere "Test":.. 11 b. The Lending Institution as an Alternative Source:.. 12 c. Lender Substantiation of Compliance with Credit Elsewhere 12 d. What Factors Are Acceptable as Substantiation?.. Factors Are Not Acceptable Substantiation?..12-1 f. What is the Certification Process Under Credit Elsewhere?..12-1 g. Must Consideration of Prevailing Rates and Terms Be Documented?..12-2 h. The Importance of Providing Credit on Reasonable i. Guidelines to Determine if Credit Terms are j.

4 How is the Availability of Credit on Reasonable Terms Determined?.. 13 k. Is Credit Card Debt Considered Reasonable?..14-1 l. Are Balloon Notes Considered Reasonable?..14-1 m. Are Demand Notes Considered Reasonable?..14-1 n. Are Interest Only Notes Considered Reasonable?..14-2 o. Internal Resources as an Alternative Source:..14-2 p. External Resources as an Alternative Source:..14-2 q. Personal Resources as an Alternative Source:.. OF PERSONAL is the Purpose of the Personal Resources Rule?.. Whom Does Personal Resource Rule Apply?.. 15 c. Personal Resources of 16 d. The Utilization of Personal Resources 17 e. How is the Amount of the Personal Exemption Determined?.. 18 Processing SOPSOP 50-10(4)(E)Effective: 12-01-00vii f. Requirements Imposed on the Excess Liquid 18 g.

5 The "Total Financing Package".. 19 h. Which Assets Are Not Considered "Liquid Assets?".. 23 i. Cash Surrender Values of Life j. Additional Exemption for Pledged Liquid k. Pledging Liquid Assets Rather Than Injecting Liquid l. Do Personnel Resource Limits Affect Capitalization Requirements?..23-3 m. Reducing Ownership OF FARM Agency Handles Applications from Farm Enterprises?.. to of Proceeds for Farm OF BUSINESSES FINANCED BY A Consideration is Given to Businesses with SBIC Financing?.. Controlled By SBIC' CONSIDERATION FOR TYPES OF BUSINESSES FOR business Engaged in Holder of Real and/or Personal Insurance Located in a Foreign Country or Owned by Selling Through a Pyramid Engaged in Which Restrict Entities, Excluding Native American 34 Processing SOPSOP 50-10(4)(E)Effective: Engaged in Promoting Engaged in Loan Owned by Persons of Poor Interest by Lender, CDC, or Associates In Applicant Providing Prurient Sexual Loss to the or Lobbying ELIGIBLE PASSIVE COMPANY (EPC) USES FOR business LOAN LOAN PROCEEDS to an Debt Owed to an Plan of the Benefit of Other Than the Applicant of Delinquent Existing Officer's Report Contents When Refinancing is May We Refinance a Participant's Debt?

6 We Refinance An SBA Loan?.. 59 e. Paying Off Seller Debt is Not Refinancing in of Change of on Expedited Processing for Refinancing:..59-1 Other Conditions Apply to Debt Refinancing?..59-2 Do We Treat Interim Loans and Trade Payables? ..59-2 Processing SOPSOP 50-10(4)(E)Effective: Is Debt Repayment Identified in the PART OF A BUILDING ACQUIRED WITH LOAN Does "Under the Same Conditions" Mean?.. Does "Rentable Property" Mean?.. Proceeds Be Used to Remodel or Convert Rental Space?.. the SBC Meet Occupancy Requirements Restrictions When Renovation Cost Exceeds Purchase to Acquire, Build, or Renovate Residential Income As a Source of REQUIREMENTS PLACED ON A of is a Forward Commitment?.. REQUIREMENTS FOR PARTICULAR TYPES OF Register of Historic and Shore to Medical to Americans Loans Collateralized by Indian Lands Held in Protection Agency (EPA) Owned by Persons Not Citizens of the United 70 i.

7 Restrictions on Businesses Involved in International 3 - 71 Processing SOPSOP 50-10(4)(E)Effective: OF SBA SIZE Affiliates Affect Size Standard Eligibility?.. Else Must Be Considered When Affiliates Are Involved?.. Owned by Close Family Are Complicated Affiliation Questions to be Handled?.. of Licensees/Franchisees with their OF ANNUAL OF " business CONCERN OR CONCERN".. 'S CALCULATION OF NUMBER OF OF A CONCERN'S "PRIMARY INDUSTRY".. FOR MISREPRESENTATION OF SIZE STANDARDS ARE IDENTIFIED BY SIC STANDARDS APPLICABLE TO FINANCIAL SIZE STATUS OF AN APPLICANT IS PROCEDURES BEFORE A FORMAL REQUIREMENTS FOR REFINANCING AN SBA REQUIREMENTS FOR LOANS RELATED TO SOPSOP 50-10(4)(E)Effective: 12-01-00xiCHAPTER 4 - 'S LENDING of of of business Should Repayment Ability Be Evaluated?.. of Repayment Investment of Long Term is SBA's Policy Regarding Collateral For 7(a) Loans?

8 Are Affiliates Evaluated In Repayment Analysis?.. SBA Maximums for SBA's Loan to 5 - LOAN LOAN CONDITIONS:.. 99b. Waiver of REQUIREMENTS:.. POLICIES REGARDING HAZARD INSURANCE:.. - LOAN PROCEEDS RESTRICTIONS:..106 Processing SOPSOP 50-10(4)(E)Effective: REQUIRED TERMS AND CONDITIONS:.. Statement Insurance Asset and Salary Limitation of Lease Loan Provision Requirements for Franchise CONSIDERATIONS:..115 CHAPTER 6 - LOAN Processing IMPOSED BY LAW AND EXECUTIVE Related to Flood Related to Child Support Related to Flood-Plain and Wetland Barrier with Other OF RULE CHANGES ON EXISTING FILING SBA Office Processes Two Applications From Two SOPSOP 50-10(4)(E)Effective: OF business LOAN Form 4 and 4-I for 7(a) OR SBA Form 1244, Parts A, B, & C For Form 4, Schedule A 7(a) (Use of SBA Form Optional).. Required By Laws and Executive Financial Statements (Required, Applicant Uses Own Forms).

9 Return Requirements - Including Financial Statement (Required, Use of SBA Form Optional).. Fees and Compensation (SBA Form 159 Required).. Regarding Debarment (SBA Form 1623/1624 Required).. and Influence Peddling (Forms Required as Noted).. Has The Authority to Approve or Decline Loans?.. Required for Authority to Take Official of District Directors to Take Final I Process a Loan Which Exceeds My Authority?.. is Authorized to Screen Out or Decline Loans?.. Recommending and/or Approval Authority Be Waived?.. Information Is Needed When a Waiver is Requested?.. Conducts CCA Training?.. All Employees Take This Training?.. The Courses Be Completed Quickly?.. is the Training for New Employees?.. Qualifications Are Needed to Process Qualifications Needed to Recommend/Decide Needed to Take Final Action on of Officials Taking Final Action on Credit AFTER Needed with Request for SOPSOP 50-10(4)(E)Effective: May Take Final Action on Reconsiderations?

10 Declinee of Second Reconsideration Are The Procedures for Second Reconsiderations?.. Notifies Applicant When Second Reconsiderations Are Declined?.. Prepares The Authorization if Second Reconsideration Approved?.. OF Division Modifies the Authorization When Needed?.. is the Procedure When the 327 Stamp Method is Used?.. a Lender's Percentages of Participation on a Loan be Changed?.. Disbursement Periods Be Extended?.. the Due Date of the Guaranty Fee be Extended?.. The Guaranty Fee Be Rebated to The Lender?.. CLOSING FOR LOAN Has Responsibility for Loan Closings?.. Is The ED Loan Officer's Role in Loan Closings?.. Are The General Requirements for Closing a Loan?.. Requirements for 7(a) Guaranty Are The Closing Procedures for a 504 Loan?.. of Escrow Accounts for 504 AND REINSTATEMENT OF Is The Procedure for Canceling Loans?.. Canceled Loans Be Reinstated?.. OR ADDITIONAL a. What Are The Guidelines For Loan Increases?