SBA Lender and Development Company Loan Programs (SOP 50 10 7.1)
See the original SOP here
The document titled "SOP 50 10 7.1 effective 11.15.23.pdf" is the Standard Operating Procedure (SOP) 50 10 7.1 issued by the U.S. Small Business Administration (SBA) for its Lender and Development Company Loan Programs. This SOP, authorized by Kathryn Frost, the Acting Associate Administrator for Capital Access, came into effect on November 15, 2023. It serves as an update to the previous version, SOP 50 10 7, and outlines the policies and procedures governing the 7(a) and 504 loan programs offered by the SBA.
The SOP is divided into three main sections:
- **Section A: Core Requirements for all 7(a) and 504 Loans** - This section provides the foundational requirements applicable to both 7(a) and 504 loan programs. It includes chapters on primary applicant eligibility requirements, credit availability, special transaction structures, uses of proceeds, and ethical considerations, among others.
- **Section B: 7(a) Loan Program Specific Requirements** - This section delves into the specifics of the 7(a) loan program, detailing the requirements for standard 7(a) loans, 7(a) small and SBA Express loans, 7(a) CAPLines, 7(a) Export Trade Finance, and the E-Tran terms and conditions through disbursement for all 7(a) loans.
- **Section C: 504 Loan Program Specific Requirements** - This section focuses on the 504 loan program, covering eligibility through the submission of applications, SBA E-Tran terms and conditions through disbursement, and debenture pricing and funding.
The SOP emphasizes the importance of SBA Lenders and Certified Development Companies (CDCs) starting their review process with the core requirements outlined in Section A. It also highlights the necessity for SBA Lenders to comply with the detailed guidance provided for each delivery method in the applicable chapters of Section B and C.
Significant updates in this version include the introduction of SBA’s Risk Mitigation Framework for determining applicant eligibility, the use of technology to validate applicant data, and the emphasis on real-time validation of program eligibility to protect against fraud and ineligibility. The document also specifies the conditions under which SBA Lenders can request exceptions to policy and the procedures for such requests.
Appendices at the end of the SOP provide additional resources, including forms, acronyms, definitions, and specific requirements for environmentally sensitive industries and gas station loans.
This SOP is a comprehensive guide for SBA employees and SBA Lenders, ensuring that they adhere to the updated policies and procedures for the effective and efficient administration of the 7(a) and 504 loan programs[1].