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May 20, 2015

Best Practices: NEW E-Tran Requirements in SOP 50 10 5(H)

by Kristen G. Dickey

As Ethan Smith recently explained in his article Best Practices: Clarifications to SBA’s Debt Refinance Requirements, the SBA published Information Notice 5000-1340 on May 4, 2015 and rolled out SOP 50 10 5 (H), which is effective for all loan applications received after May 1, 2015.

The Information Notice also identifies several revisions to SBA requirements in the new SOP regarding the use of E-Tran for: (i) 7(a) Loan Applications; (ii) the request for SBA consent by a delegated lender for a loan increase or decrease prior to final disbursement; and (iii) notification to SBA of specific changes to a loan prior final disbursement by delegated and non-delegated lenders.

CHAPTER 6: WHERE TO SUBMIT APPLICATION FOR GUARANTY
• All lenders must submit 7(a) applications for guaranty via E-Tran ONLY.
• There is no e-mail option.
• E-Tran capacity has been increased to accept larger files, but if an attachment is too large to be submitted through E-Tran, Lenders may still submit the large attachment through “Send This File” [http://www.sba.gov/aboutsba/sbaprograms/elending/lgpc/index.html
click on “Submit 7(a) Document Here” or “send this file.com”]

CHAPTER 7: POST-APPROVAL/PRE-FINAL DISBURSEMENT REQUESTS FOR CHANGES TO INCREASE OR DECREASE IN LOAN AMOUNT OR GUARANTY PERCENTAGE:
• Non-Delegated Loans [This process remains the same.]
• Delegated Loans [This process has changed!]
o For SBA loans approved under a lender’s delegated authority, lenders must obtain approval of an increase or decrease in the loan amount in E-Tran ONLY.
 Approval of the requested increase or decrease in E-Tran will constitute SBA’s prior written consent.
 There is no e-mail option.
 For SBA loans approved under lender’s delegated authority, lenders must obtain approval of an increase or decrease in the guaranty percentage by submitting a written request to the LGPC that includes:
 Name of the lender;
 Name of the lending officer;
 Phone number, fax number;
 Name of the borrower;
 SBA Loan Number; and
 Specific information  How it is now? How it should be? Why? [Provide justification for change and any supporting documentation.]

CHAPTER 7: POST-APPROVAL/PRE-FINAL DISBURSEMENT NOTIFICATION TO SBA OF OTHER CHANGES (identified herein)
• Lenders must inform SBA of the following actions via E-Tran ONLY [SBA approval of these items is not necessary, and SBA will not respond in writing]:
o Cancellation of the entire loan;
o Change in the maturity date;
o Change in the legal name of the business;
o Change in the trade name of the business; or
o Change in the borrower’s business address.
• There is no e-mail option.

Lenders should take care that they are complying with the current SBA regulations relating to E-Tran. For more information regarding E-Tran requirements, please contact Kristen at (407) 667-8811 or at kdickey@starfieldsmith.com.