Effective February 1st, 2015, the Small Business Administration (the “SBA”) updated its Servicing and Liquidation Actions 7(a) Lender Matrix (the “Matrix”) to include circumstances when all 7(a) lenders would be required to notify the SBA of certain unilateral servicing and liquidation actions through E-Tran, including loans that are in “approval,” “regular servicing,” or “liquidation” status. The Matrix is a tool created by the SBA to help guide 7(a) lenders in servicing and liquidating their loans and provides a lender with a summary of requirements that are defined in the SBA Standard Operating Procedure (the “SOP”).
Since 2015, the SBA has modified the Matrix three times, with the latest version effective July 20, 2016, and references a total of 16 unilateral actions that 7(a) lenders can process without formal SBA approval for non-delegated authority loans. These modifications do not require SBA approval and can be completed via E-Tran.
The complete list of unilateral modifications includes:
In all circumstances, 7(a) lenders must document the business reason and justification for their decisions and retain these and other supporting documents in the loan file for future SBA review to determine if the actions taken were prudent, commercially reasonable (consistent with generally accepted commercial lending practices), and complied with applicable Loan Program Requirements (as defined in 13 CFR §120.10).
7(a) lenders should make it a priority to stay up-to-date on E-Tran requirements and use the platform whenever possible to complete unilateral actions. For more information regarding unilateral modifications on SBA loans, please contact Kristen at (407) 618-0698 or at kdickey@starfieldsmith.com.
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