SBA and SEED Summary

SBA and SEED Summary

The 504 Debt Refinance Program returned permanently on June 24, 2016 (SBA Policy 5000-1382):

·  See the SEED Checklist for guidelines.

Debt Refi is improved on November 17, 2016 (SBA Policy 5000-1939):

·  LTV limitation increased from 75% to 85% for loans with “Business Operating Expenses”;

·  Eligibility for businesses defined as “New” adjusted;

·  Appraisal dating increased from six months to one year being valid.

SBA Issues SOP 50 10 5(I) as well as Revised Franchise Review on November 22, 2016 and effective January 1, 2017 (SBA Policy 5000-1399):

·  SBA will only consider the franchise or license agreements of the applicant concern (no longer considering affiliate concerns);

·  Single “SBA Addendum to Franchise Agreement-2462” as long as franchise has the right to operate the business, significant control over the method of operation not exerted and is making required payment;

·  No longer maintaining a centralized listing of franchise systems (“Franchise Registry”);

·  Cannot disburse a loan until obtaining executed Franchise Agreement; SBA Addendum to Franchise Agreement, and reviewing all other documentation to ensure compliance with SBA Loan Program Requirements – No SBA submission.

Updated Franchise Review Process published February 14, 2017 (SBA Policy 5000-1941):

·  SBA accepting both Revised Addendum to Franchise Agreement-2462 or Certification-2463 with a 2015 or 2016 SBA Negotiated Agreement;

·  Under delegated authority: retain previously outlined documentation in file. However, when processing non-delegated, both 7a Lenders and CDC must submit the Franchise Agreements (even if not signed) and Addendums to SBA (504 Program processing returns to a pre-application review process prior to submission of an application).

Revised Procedures for SBA forms 912 (Borrower Stmt of Personal History) and 1081 (Lender Stmt of Personal History) occurred December 14, 2016 (SBA Policy 5000-1401):

·  Relaxed procedures – If all “no’s” to the questions – keep in file and NO submission;

·  If one or multiple misdemeanor convictions whose conditions were met occurred more than six months ago, form and supporting documentation can just be kept in file;

·  If misdemeanor offense is within than six months, for crimes against minors or felony’s, the form, fingerprints and all supporting documentation must be submitted to the SBA for processing by Office of Personnel Security (“OPS”) – candidate must be cleared before a loan approval will occur.

SBA Rescission of Rebranding – No Advantage or Loan Grow – the names 7(a) and 504 are returning and safe (SBA Policy 5000-1943) effective March 9, 2017!

SEED’s Annual Lender Training - 504 and 7(a) Loan Programs

Thursday, 4/6/17 (8 AM to 12:30 PM), Towne Plaza Suites, Wareham, MA