Best Practices: Criteria for Evaluating Management Agreements
https://starfieldsmith.com/wp-content/uploads/2025/06/310b0513-69cf-4930-96c2-725a590edd58.mp3 One of the benchmarks of the SBA loan program is that SBA loans are made to operating small businesses and not passive entities. If a small business enters into a Management Agreement with a third party to assist with running its business, it presents a grey area for Lenders as to whether the business ... Read More
Best Practices: Contaminated Properties under SOP 50 10 8
https://starfieldsmith.com/wp-content/uploads/2025/06/ecf2ada2-1416-4d11-a9c4-e7dc21c86ed6.mp3 During the closing process, lenders anticipate their Phase I Environmental Reports will show that real estate serving as collateral is clean. However, this is not always the case and lenders should be prepared for environmental issues to arise during due diligence – particularly when working with businesses in environmentally sensitive industries—such as gas stations, ... Read More
Best Practices: Key Highlights of the Technical Updates to SOP 50 10 8
https://starfieldsmith.com/wp-content/uploads/2025/06/5ce3c78e-4912-48ee-895c-f2da27a873f8.mp3 On May 29, 2025 the U.S. Small Business Administration (“SBA”) issued SBA Information Notice 5000-868665 and released the Standard Operating Procedure 50 10 8 with technical updates (“Updated SOP”), which became effective June 1, 2025. The Updated SOP replaced the version which was previously distributed for review on April 22, 2025. The SBA also provided ... Read More
Best Practices: Franchise Lending under SOP 50 10 8
https://starfieldsmith.com/wp-content/uploads/2025/06/f6a0c6dd-4e3a-4110-9fde-651ea9eefd08.mp3 What’s old is new again. Effective June 1, 2025, SOP 50 10 8 (“SOP”) brings back the SBA Franchise Directory (“Directory”) in a welcome blast from the past for SBA lenders. See https://www.sba.gov/document/support-sba-franchise-directory. The SOP shifts responsibility for franchise eligibility reviews from the lender back to the SBA. Many seasoned SBA lenders will recall the ... Read More
Best Practices: Eligible Transaction Structures for Changes in Ownership
https://starfieldsmith.com/wp-content/uploads/2025/05/6b7d844c-a90e-4c3d-a2d6-2362e230e030.mp3 In recent weeks, my colleagues have been examining various components and modifications introduced by the newly enacted Standard Operating Procedure 50 10 8 (“SOP”). As we continue to further analyze the SOP, it is important to discuss the changes made to the rules concerning changes of ownership structures. This article aims to provide an ... Read More
Best Practices: What SBA Lenders Need to Know About the Return of the Credit Elsewhere Test in the SOP 50 10 8
https://starfieldsmith.com/wp-content/uploads/2025/05/3312a34f-39ab-4a81-b7aa-362a8086873b.mp3 Under the current SOP 50 10 7.1, lenders could essentially treat the Credit Elsewhere Test as a check-the-box exercise. That will no longer be the case starting June 1, 2025, when the SOP 50 10 8 becomes effective. The new SOP 50 10 8 reverts to prior practices of mandating a narrative within the ... Read More
